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Economy in Brief

U.S. Mortgage Applications Retreat
by Tom Moeller  October 17, 2012

The Mortgage Bankers Association index of total mortgage applications fell 4.2% last week (+52.3% y/y), down for the second straight week. The decline was led by a 5.3% drop (+60.6% y/y) in applications to refinance an existing loan. Home purchase applications inched up 0.9% last week (24.5% y/y) with the recovery in home sales. Applications for fixed interest rate loans rose 55.4% y/y as lower mortgage rates were locked in. Adjustable rate loan applications gained just 2.3% y/y.

The average loan size was $219,400 (3.0% y/y). The average for home purchases was $242,700 (15.7% y/y) while for refinancings it was unchanged y/y at $214,200. The average size of a fixed rate loan was $206,300 and for variable rate loans it was $539,900. 

The effective rate on fixed-interest, conventional 15-year mortgages held steady last week at 2.97% but remained down compared to 3.47% in January. The effective rate on a 30-year fixed rate held at 3.69% but the effective rate on a Jumbo 30-year loan rose to 3.93%. Though it's narrowed slightly of late, the spread between 15- and 30-year loan rates continued wide by historical standards. The effective interest rate on an adjustable 5-year mortgage was stable at 2.72% and was down from its 3.93% high during February of last year.

The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey covers roughly 50% of all U.S. residential mortgage applications processed each week by mortgage banks, commercial banks and thrifts. The figures for weekly mortgage applications are available in Haver's SURVEYW database. 

 

MBA Mortgage Applications (SA, 3/16/90=100) 10/12/12 10/05/12 09/28/12 Y/Y% 2011 2010 2009
Total Market Index 964.0 1,006.2 1,020.4 52.3 572.3 659.3 736.4
 Purchase 200.9 199.2 194.2 24.5 182.6 199.8 263.5
 Refinancing 5.452.9 5,757.3 5,888.0 60.6 2,858.4 3,348.1 3,509.2
15-Year Mortgage Effective Interest Rate (%) 2.97 2.98 2.97 3.71
(10/11)
3.97 4.39 4.85
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