U.S. Mortgage Applications Rebound in the July 7 Week While Rates Rise Further
Summary
- Purchase applications rise for the fourth week in five while applications for loan refinancing fall to a five-week low.
- Effective interest rates rise for all types of mortgages; at a record high for 30-year Jumbo and 5-year ARM.
- The average size of a mortgage loan increases for the third week in four.
Mortgage applications rose 0.9% w/w (-30.5% y/y) in the week ending July 7 after a 4.4% decline in the week ending June 30, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. The latest w/w rise was the fourth in five weeks to the index level of 208.4.
Applications for loans to purchase a house rebounded 1.8% (-26.3% y/y) in the latest week, the fourth w/w increase in five weeks, following a 4.6% drop in the previous week. Applications for loan refinancing fell 1.3% (-39.3% y/y), the third w/w fall in four weeks to a five-week low, on top of a 4.1% decline in the prior week.
The share of applications for refinancing an existing loan fell to 26.8% of total applications in the July 7 week, the lowest since the May 26 week, from 27.4% in the June 30 week. In contrast, the adjustable-rate mortgage (ARM) share of activity increased to 6.6% in the July 7 week, the highest since the June 2 week, from 6.2% in the prior week.
The effective interest rate on a 30-year fixed-rate loan rose to 7.28% in the July 7 week, the highest since the November 4, 2022 week, from 7.04% in the June 30 week. The rate on 15-year fixed-rate mortgages increased to 6.72% in the July 7 week, the highest since the October 21, 2022 week, from 6.52% in the previous week. The rate on a 30-year Jumbo loan rose to a record 7.21% in the latest week from 7.14% in the prior week. The rate on a 5-year ARM loan jumped to a record 6.77% in the July 7 week from 6.45% in the previous week; it was up from 5.83% at the end of December 2022.
The average size of a mortgage loan rebounded 0.4% (2.0% y/y) to $380,200 in the July 7 week, the third w/w gain in four weeks, following a 1.4% drop to $378,800 in the June 30 week; it was higher than the average of $347,600 at the end of last year. The average size of a purchase loan rose 0.6% (2.6% y/y) to $426,100 in the July 7 week, the first w/w rise in three weeks, after a 1.1% decline to $423,500 in the prior week, while the average size of a loan to refinance a mortgage fell 2.2% (-8.1% y/y) to $254,900, the third w/w fall in four weeks, after a 2.4% decrease to $260,700.
The Mortgage Bankers Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver's SURVEYS database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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