U.S. Mortgage Applications Surge as Interest Rates Decline Last Week
by:Tom Moeller
|in:Economy in Brief
Summary
- Purchase applications edge higher while refinancing continues to surge.
- Interest rate on 30-year fixed-rate loan declines sharply.
Mortgage loan applications increased 6.9% (10.6% y/y) in the week ended August 2 following a 3.9% decline one week earlier. It was the highest level since January. Applications for a loan to purchase a home grew 0.8% (-10.7% y/y) last week following declines in four of the prior five weeks. Applications to refinance a mortgage surged 15.9% (59.0% y/y) in the latest week after falling 7.2% in the prior week. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
The effective interest rate on 30-year fixed-rate loans of 6.72% last week compared to 7.00% in the prior week. It was the lowest rate since the first week of May 2023, and below the 8.12% high in the third week of October 2023. The effective rate on 15-year fixed-rate loans fell to 6.22% in the latest week from 6.40% in the week before. The rate on 30-year Jumbo loans was 6.91% in the week of August 2, down from 7.22% the prior week, while the rate on 5-year ARM loans dropped to 6.17%, the lowest level since the last week of 2023.
The share of applications to refinance an existing loan rose to 41.7% in the week of August 2 from 38.2% the week before. The latest figures are increased from a low of 27.2% averaged in April 2023. The share of applications for ARMs rose to 6.3% last week from 5.7% in the prior week. A recent low for the ARM share was 5.4% in week ended January 5.
The average size of mortgage loans in the week of August 2 was $379,200, up from $367,400 the week before and increased 2.3% from one year earlier. The average size of a loan to purchase a home was $426,900 (2.5% y/y) in the latest week, up from $425,800 in the prior week. The size of a refinance loan jumped to $312,400 (+21.7% y/y) from $273,000 during the week before.
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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