U.S Mortgage Applications Took a Breather in The Latest Week
Summary
- Mortgage applications declined by 1.5% in the December 15 week.
- Mortgage applications for both loans to purchase and to refinance posted small weekly declines.
- Effective mortgage interest rates dropped in the latest week, with the 30-year fixed rate down 23bps, the eighth consecutive weekly decline.
Mortgage applications declined by 1.5% (-9.8% y/y) in the week ending December 15, following the 7.4% w/w (-7.7% y/y) jump in the week ending December 8, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. The weekly decline is the first after six successive weekly gains. Applications for loans to purchase a house eased 0.6% (-18.5% y/y) following the rise of 3.5% (-18.1% y/y) in the prior week. Applications for loan refinancing dropped 1.8% (+17.8% y/y) in the latest week, following the sharp rise of 19.4% (27.2% y/y) in the week ending December 8.
Mortgage interest rates fell further in the week ending December 15. The effective interest rate on a 30-year fixed-rate loan dropped 23bps to 7.01% from 7.24% in the week ending December 8, and down from 7.59% in the November 17 week and 8.12% in the October 20 week. The rate on 15-year fixed-rate mortgages fell 22bps to 6.60% in the attest week from 6.82% in the prior week. The rate on a 30-year Jumbo loan dropped 5bps to 7.28% in the week ending December 15, from 7.33% in the week ending December 8, while the rate on a 5-year ARM loan declined 21bps to 6.54% in the latest week from 6.75% in the week ending December 8.
The share of applications for refinancing an existing loan rose to 39.7% in the week of December 15, up from 39.2% in the week of December 8. The last time it had reached a level this high was in early April 2022. The adjustable-rate mortgage (ARM) share of activity was unchanged at 6.3% in the latest week, following six consecutive w/w declines.
The average size of a mortgage loan rose 1.3% w/w (0.5% y/y) to $360,100 in the week ending December 15, after a rise of 2.7% w/w (-2.5% y/y) to $355,400 in the week ending December 8.The average size of a loan to purchase a home rose 2.0% (4.5% y/y) to $416,000 in the latest week, after a rise of 2.9% (1.6% y/y) to $407,900 in the prior week. The average size of a loan to refinance a mortgage edged up 0.4% (1.4% y/y) to $274,900 in the week ending December 15, following the 9.0% (-0.7% y/y) jump to $273,700 in the week ending December 8.
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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