U.S. Mortgage Applications Rebound to a Four-Week High After Four Straight Weekly Drops
Summary
- Following four successive w/w declines, applications for loans to purchase rise to a four-week high and applications for refinancing a loan rise to a three-week high.
- Effective interest rates decline for 30-year FRM but rise for other types of mortgages.
- Average loan size falls for the third consecutive week.
Mortgage applications rose 7.2% w/w (-32.1% y/y) in the week ending June 9 after a 1.4% decline in the week ending June 2, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. The latest reading was the first weekly rise since a 6.3% w/w gain in the May 5 week and the highest index level since the May 12 week.
Applications for loans to purchase a house rebounded 7.6% (-27.5% y/y) in the latest week, the first w/w increase since the May 5 week to a four-week high, following a 1.7% drop in the previous week. Applications for refinancing a loan recovered 6.0% (-41.0% y/y), the first w/w rise since the May 5 week to a three-week high, after a 0.7% decline in the prior week.
The share of applications for refinancing an existing loan was unchanged at 27.3% of total applications in the June 9 week. The adjustable-rate mortgage (ARM) share of activity fell to 6.5% in the June 9 week, the lowest since the May 12 week, after registering at 6.8% in the prior two weeks.
The effective interest rate on a 30-year fixed-rate loan declined to 6.96% in the June 9 week, a three-week low, from 7.00% in the June 2 week. In contrast, the rate on 15-year fixed-rate mortgages rose to 6.51% in the June 9 week after falling to 6.40% in the previous week. The rate on a 30-year Jumbo loan increased to 6.94% in the latest week after declining to 6.90% in the prior week. The rate on a 5-year ARM loan rose to a record 6.33% in the June 9 week from 6.29% in the previous week.
The average size of a mortgage loan dipped 0.1% (+1.3% y/y) to $380,900 in the June 9 week from $381,200 in the June 2 week, registering the third successive w/w decline to the lowest level since the March 3 week. The average size of a purchase loan fell 1.1% (+1.5% y/y) to $425,100 in the June 9 week, the lowest level since the February 3 week, from $429,700 in the prior week, while the average size of a loan to refinance a mortgage rebounded 4.5% (-7.1% y/y) to $263,200, a three-week high, from $251,800.
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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