U.S. Mortgage Applications Strengthen Last Week
by:Tom Moeller
|in:Economy in Brief
Summary
- Surge in refinancing continues to overshadow rise in purchase loans.
- Interest rates fall further.
- Average loan size jumps again for both purchase and refinanced loans.
Mortgage loan applications jumped 11.0% (56.2% y/y) in the week ended September 20 following the prior week’s 14.2% increase. Applications for loans to purchase a home rose 1.4% (2.3% y/y) after the prior week’s 5.4% increase. Applications to refinance an existing mortgage surged 20.3% (175.2% y/y) after a 24.2% increase in the prior week. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
In the week ended September 20, the effective rate on a 30-year fixed-rate loan eased to 6.29% from 6.32% in the previous week. This was the lowest rate since the second week September 2022 and below the recent peak of 8.12% in the third week October 2023. The effective rate on a 15-year mortgage was steady w/w at 5.60% and the lowest since the second week of September 2022. The rate on a 30-year Jumbo loan edged up to 6.61% from 6.57%, and the rate on a 5-year ARM rose to 5.92% from 5.84% in the prior week.
The share of loans to refinance an existing mortgage jumped to 55.7% in the week of September 20. This is increased from 26.7% late in May 2023. The share of applications for ARMs held steady at 5.9% last week.
The average size of a mortgage loan jumped to $413,100 in the week of September 20, up from $395,800 one week earlier and 13.2% higher y/y. Purchase loans averaged $447,700 in the latest week, up from $437,700 in the prior week and up 7.5% y/y. The average size of loans to refinance an existing mortgage jumped 8.4% to $385,600 last week, up from $355,800 one week earlier and by one-half versus a year ago.
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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