U.S. Mortgage Applications Up for the Third Straight Week While Rates Drop Further
Summary
- Purchase applications rise for the third consecutive week; applications for loan refinancing up for the fourth week in five.
- Effective interest rates drop for all types of mortgages except 5-year ARM.
- The average size of a mortgage loan falls for the fifth week in six.
Mortgage applications increased 3.0% w/w (-16.3% y/y) in the week ending November 17 after a 2.8% rise in the week ending November 10, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. The latest reading was the third successive weekly gain to the index level of 175.6, a six-week high. Applications for loans to purchase a house rose 3.9% (-20.6% y/y) in the latest week, the third straight w/w rise, on top of a 3.3% increase in the previous week. Applications for loan refinancing grew 1.6% (-3.7% y/y), the fourth w/w gain in five weeks, following a 2.0% increase in the prior week.
Mortgage interest rates fell further; thus, having provided a boost to mortgage applications. The effective interest rate on a 30-year fixed-rate loan dropped 21bps to 7.59% in the November 17 week, the lowest since the September 15 week, from 7.80% in the November 10 week; it was down 53bps from a peak of 8.12% in the October 20 week. The rate on 15-year fixed-rate mortgages fell 11bps to 7.08% in the November 17 week, the lowest since the September 22 week, from 7.19% in the previous week; it was down 36bps from a high of 7.44% in the October 27 week. The rate on a 30-year Jumbo loan declined 16bps to 7.69% in the latest week, the lowest since the September 22 week, after rising to 7.85% in the prior week; it was down 30bps from a high of 7.99% in the October 27 week. By contrast, the rate on a 5-year ARM loan rebounded to 7.06% in the November 17 week from 6.91% in the previous week, but it was down 25bps from a high of 7.31% in the October 27 week.
The share of applications for refinancing an existing loan rose to 32.4% of total applications in the November 17 week from 31.9% in the November 10 week, registering the fourth w/w rise in five weeks to the highest since the September 16, 2022 week (32.5%). In contrast, the adjustable-rate mortgage (ARM) share of activity fell to 8.3% in the November 17 week, the third successive w/w fall to the lowest since the September 29 week, from 8.8% in the prior week.
The average size of a mortgage loan dropped 1.3% w/w (-3.4% y/y) to $351,000 in the November 17 week following a 0.3% rebound to $355,700 in the November 10 week, posting the fifth weekly decline in six weeks to the lowest since the January 6 week. The average size of a purchase loan fell 0.7% (0.9% y/y) to $403,600 in the November 17 week after a 0.3% increase to $406,600 in the prior week, registering the fifth w/w fall in six weeks to the lowest since the January 13 week. The average size of a loan to refinance a mortgage dropped 2.3% (-10.9% y/y) to $241,200 in the November 17 week after a 1.4% rise to $247,000 in the previous week, posting the first w/w decline in three weeks to the lowest since the February 24, 2017 week.
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.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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