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Economy in Brief

U.S. Mortgage Applications Surge In 2012
by Tom Moeller  January 9, 2013

Mortgage lenders were busy last year. The Mortgage Bankers Association index of total mortgage applications rose 42.2% in 2012 after declining during the prior two years. For last week, applications rose 11.7% (9.5% y/y) yet remained 28.8% below the late-September peak. Applications to refinance an existing loan rose more than one-half from 2011 after two years of decline. For the week, refinancing applications rose 12.1% after three down  weeks. Applications were one-third below the late-September high. Home purchase applications rose a modest 2.8% last year from 2011 after falling during five of the prior six years. For the week, applications rose for the first time in four weeks but remained roughly two-thirds below the late-2007 high.

Applications for fixed interest rate loans rose 44.4% during all of last year as borrowers locked in lower financing rates. Adjustable rate loan applications rose 7.0%. The average mortgage loan size was $220,500. The average for home purchases was $237,200 last year while for refinancings it was $216,100. The average size of a fixed rate loan was $206,100 last year and for variable rate loans it was $524,400. 

The effective rate on fixed-interest, conventional 15-year mortgages averaged 3.25% last year versus 3.97 in 2011. Last week, the rate was 2.98% and remained down compared to 3.47% in January. The effective rate on a 30-year fixed rate was 3.72% last week while the rate on a Jumbo 30-year loan was 3.90%. Though it's recently narrowed, 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 roughly stable at 2.78%, 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) 01/04/13 12/28/12 12/21/12 Y/Y% 2012 2011 2010
Total Market Index 726.4 650.3 725.5 9.5 813.8 572.3 659.3
 Purchase 185.7 169.5 189.4 4.9 187.8 182.6 199.8
 Refinancing 3,956.6 3,528.3 3,937.4 11.1 4,505.0 2,858.4 3,348.1
15-Year Mortgage Effective Interest Rate (%) 2.98 2.92 2.89 3.47
3.25 3.97 4.39
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