U.S. Mortgage Applications Strengthen as Interest Rates Decline
by:Tom Moeller
|in:Economy in Brief
Summary
- Total applications move up after three weekly declines.
- Purchase & refinancing loans increase.
- Mortgage rates fall to five-week low.
Mortgage applications increased 2.5% (-17.0% y/y) in the week of November 3 after falling 2.1% in the prior week, according to the Mortgage Bankers Association Weekly Mortgage Applications Survey. Applications for loans to purchase a home rose 3.0% (-20.7% y/y) in the latest week after falling 1.4% one week earlier. Applications to refinance a loan improved 1.6% (-6.9% y/y) following a 3.5% decline in the prior week.
The effective interest rate on a 30-year fixed rate loan fell to 7.81% last week from 8.07% one week earlier. The effective rate on a 15-year fixed-rate loan declined to 7.20% from 7.44% in the prior week. The rate on a 30-year Jumbo loan declined to 7.77% in the latest week from 7.99%, while the rate on the 5-year adjustable-rate mortgage dropped to 7.06%, its lowest level in four weeks.
The share of loans to refinance an existing loan rose to 31.4% in the week ended November 3 and reversed the prior week’s decline to 31.2%. This is 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 to 9.8% from 10.7% in the previous week. It has increased from a low of 5.9% in the third week of July.
The average size of a mortgage loan eased 0.4% (-3.7% y/y) to $354,600 last week. The average size of a loan to purchase a home slipped 0.6% (+0.5% y/y) to $405,200 from $407,800 the week prior. It was down from a recent high of $442,000 in the third week of May. The average size of a loan to refinance a mortgage rose 0.8% (-12.3% y/y) to $243,700.
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.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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