U.S. Mortgage Applications Surge as Interest Rates Remained Low Last Week
Summary
- Mortgage loan applications jumped in the week ended August 9.
- Purchase applications edge higher while refinancing continues to surge.
- Interest rate on 30-year fixed-rate loan held steady at lower levels not seen since May 2023.
Mortgage loan applications jumped 16.8% (30.2% y/y) in the week ended August 9, following an unrevised 6.9% (10.6% y/y) rise in the week ended August 2. It was the highest level since January 2023. Applications for a loan to purchase a home rose 2.8% (-7.9% y/y), following a 0.8% (-10.7% y/y) rise in the prior week. Applications to refinance a mortgage surged 34.5% (117.8% y/y) in the week ended August 9, after a 15.9% (59.0% y/y) jump in the week of August 2. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
The effective interest rate on 30-year fixed-rate loans was largely unchanged at 6.71% in the week ended August 9, compared to 6.72% in the prior week. It was the lowest rate since the first week of May 2023. The effective rate on 15-year fixed-rate loans fell 9bps to 6.13% in the latest week from 6.22% in the week before. The rate on 30-year Jumbo loans dropped 3 bps to 6.88% in the week of August 9, from 6.91% in the week of August 2. In contrast, the rate on 5-year ARM loans rose 19bps to 6.36% from 6.17%, which had been the lowest level since the last week of 2023.
The share of applications to refinance an existing loan rose to 48.6% in the week of August 9 from 41.7% in the week of August 2. The latest figures are increased from a low of 27.2% averaged in April 2023. The share of applications for ARMs rose to 7.3% last week from 6.3% in the prior week. A recent low for the ARM share was 5.4% in the week ended January 5.
The average size of mortgage loans rose 6.3% (9.0% y/y) to $403,000 in the week of August 9, from a rise of 3.2% (2.3% y/y) to $379,200 the week before. The average size of a loan to purchase a home was up 0.1% (2.4% y/y) to $427,100 in the latest week, from a rise of 0.3% (2.5% y/y) to $426,900 in the prior week. The size of a refinance loan jumped 20.9% (49.9% y/y) to $377,600 in the week of August 9, from a rise of 14.4% (21.7% y/y) to $312,400 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.
Kathleen Stephansen, CBE
AuthorMore in Author Profile »Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.
Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).
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