U.S. Mortgage Applications Rose for Second Week as Rates Fell Further
by:Sandy Batten
|in:Economy in Brief
Summary
- Applications rose 2.8% w/w with increases in both purchases and refinancings.
- Mortgage interest rates fell further to their lowest levels since late September.
Mortgage applications increased 2.8% w/w (-16.9% y/y) in the week ended November 10, their second consecutive weekly increase after a 2.5% weekly gain in the previous week, according to the Mortgage Bankers Association Weekly Mortgage Applications Survey. Applications for loans to purchase a home rose 3.3% w/w (-21.5% y/y) in the latest week on top of a 3.0% w/w increase in the previous one. Applications to refinance a loan rose 2.0% w/w (-3.5% y/y) following a 1.6% weekly increase in the prior week.
Mortgage interest rates continued to fall and thus provided a boost to mortgage applications. The effective interest rate on a 30-year fixed rate loan slipped 1bp to 7.80% in the latest week and is down 32bps from its recent peak three weeks ago. The 15-year rate also edged down 1bp to 7.19% but has fallen 25bps in the past two weeks. By contrast, the rate on a 30-year Jumbo loan rebounded to 7.85% in the latest week from 7.77%. The rate on a 5-year adjustable-rate mortgage fell to 6.91% and has declined 40bps in the past two weeks.
The share of loans to refinance an existing loan rose to 31.9% in the week ended November 10 from 31.4% in the prior week. This is the highest reading since the week of September 22. However, this is still down sharply from roughly 50% when the Fed began raising its fed funds rate target in March 2022. The share of adjustable-rate loans declined for the second consecutive week to 8.8% from 9.8% in the previous week.
The average size of a mortgage loan edged up 0.3% w/w (unchanged y/y) to $355,700 in the week ended November 10, the first increase in five weeks. The average size of a loan to purchase a home rose 0.3% w/w to $406,600 while the average size of a refinanced loan increased 1.4% w/w to $247,000.
The Mortgage Bankers Association 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.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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