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Economy in Brief

U.S. Mortgage Applications Jump With More Refinancings
by Tom Moeller  May 8, 2013

Lower interest rates are strengthening activity in the home mortgage market. The index of total mortgage applications from the Mortgage Bankers Association jumped 7.0% last week and by one-third versus last year. The rise reflected an 8.3% increase (40.0% y/y) in applications to refinance an existing loan. Home purchase mortgage applications also gained 2.4% (11.9% y/y) along with recent reports of home sales improvement.

The effective rate on fixed-interest, conventional 15-year mortgages fell w/w to 2.89%. The effective rate on a 30-year fixed rate loan fell to 3.68% last week while the rate on a Jumbo 30-year loan slipped to 3.85%. 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 2.59%.

Applications for fixed interest rate loans rose by more than one-third y/y but adjustable rate loan applications ticked up just 0.7% y/y. The average mortgage loan size was $227,000. The average size loan for home purchases was $269,700 last week while for refinancings it was $213,700.

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) 05/03/13 04/26/13 04/19/13 Y/Y% 2012 2011 2010
Total Market Index 945.5 883.8 868.1 33.1 813.8 572.3 659.3
 Purchase 220.6 215.5 218.5 11.9 187.8 182.6 199.8
 Refinancing 5,229.7 4,829.4 4,698.0 40.0 4,505.0 2,858.4 3,348.1
15-Year Mortgage Effective Interest Rate (%) 2.89 2.91 2.99 3.36
(5/12)
3.25 3.97 4.39
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