U.S. Mortgage Loan Applications Plunged in the October 11 Week
Summary
- Loan applications to purchase and refinance a house plummeted in the latest week.
- Interest rates on all loans rose in the latest week.
- Average loan size declined.
Mortgage loan applications plummeted 17.0% (+37.9% y/y) in the week ended October 11, after a decline of 5.1% (+54.8% y/y) in the week ended October 4. Applications for loans to purchase a house dropped 7.2% (+6.6% y/y) in the week ended October 11, after a decline of 0.1% (+8.5% y/y) in the week ended October 4, while applications to refinance an existing mortgage fell 26.3% (+111.3% y/y) following a decline of 9.3% (+158.5% y/y) in the prior week. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
The effective interest rate on a 30-year fixed-rate mortgage was 6.71% in the week ended October 11, up 17 bps from 6.54% in the week ended October 4 and up 39 bps over the past two weeks. A recent high of 6.59% was reached in the week ended August 30. The effective rate on a 15-year fixed rate mortgage was 6.10% in the October 11 week, up 22 bps from the 5.88% rate in the October 4 week. The rate on 30-year Jumbo loans rose 17 bps to 6.95% in the October 11 week, from 6.78% in the October 4 week, and the rate on 5-year ARM loans rose 5 bps to 6.33% in the latest week from 6.28%.
The share of loan applications to refinance an existing mortgage was 46.5% in the week ended October 11, down from 52.4% in the week ended October 4. The share of applications for ARMs was 5.9% in the latest week, unchanged from the prior week.
The average size of a mortgage loan application was $389,200 in the week of October 11, down 3.4% w/w from $402,900 in the week ended October 4. The average size of a loan to purchase a house eased 0.9% w/w to $448,600 in the latest week from $452,600 in the October 4 week. The average size of a loan to refinance dropped 10.2% to $321,000 in the October 11 week from $357,600 in the October 4 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.
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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