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Economy in Brief

U.S. Mortgage Applications Jump; Lower Rates Spur Refinancings
by Tom Moeller  December 12, 2012

The Mortgage Bankers Association index of total mortgage applications jumped 6.2% last week (37.5% y/y) after a 4.5% rise during the prior week. The rise was paced by an 8.0% surge (46.7% y/y) in applications to refinance an existing loan. Home purchase applications ticked up 0.7% last week (9.0% y/y). Applications for fixed interest rate loans rose 41.3% y/y as rates fell. Adjustable rate loan applications fell by one quarter y/y.

The average mortgage loan size was $220,000 (-3.5% y/y). The average for home purchases was $246,300 (14.9% y/y) while for refinancings it was down 7.1% y/y to $215,600. The average size of a fixed rate loan was $208,300 and for variable rate loans it was $592,600. 

The effective rate on fixed-interest, conventional 15-year mortgages fell to 2.91% last week and remained down compared to 3.47% in January. The effective rate on a 30-year fixed rate also fell to 3.57% while the rate on a Jumbo 30-year loan declined to 3.87%. 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 2.75%, 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. 

Where Has All the Productivity Growth Gone? from the Federal Reserve Bank of Chicago can be found   here.


MBA Mortgage Applications (SA, 3/16/90=100) 12/07/12 11/30/12 11/23/12 Y/Y% 2011 2010 2009
Total Market Index 931.2 877.0 838.9 37.5 572.3 659.3 736.4
 Purchase 208.0 206.5 206.3 9.0 182.6 199.8 263.5
 Refinancing 5,242.9 4,856.7 4,575.5 46.7 2,858.4 3,348.1 3,509.2
15-Year Mortgage Effective Interest Rate (%) 2.91 2.93 2.98 3.68
3.97 4.39 4.85
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