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Economy in Brief

U.S. Mortgage Applications Depressed by Fewer Refinancings
by Tom Moeller  July 17, 2013

Mortgage applications continue their swoon. The Mortgage Bankers Association reported that total applications for a home mortgage fell another 2.6% last week (-44.5% y/y). Since early-May applications are down 45.1%. Last week's shortfall reflected a 4.2% drop (-55.7% y/y) in applications to refinance an existing loan. Home purchase mortgage applications ticked up 0.5% last week (5.4% y/y).

The effective interest rate on a 15-year mortgage slipped w/w to 3.80% from 3.86%, up from the early-May low of 2.89%. The effective rate on a 30-year fixed rate loan was stable at 4.80% last week while the rate on a Jumbo 30-year loan slipped to 4.92%. The 100 basis point spread between 15- and 30-year loan rates set another record. The effective interest rate on an adjustable 5-year mortgage slipped to 3.52%, up from its low of 2.59% at the beginning of May.

Applications for fixed interest rate loans fell by 46.3% y/y while adjustable rate loan applications slipped 3.0% y/y. The average mortgage loan size was $213,400. The average size loan for home purchases was $259,900 last week while for refinancings it remained at $186,000.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  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 SURVEYW database. 

MBA Mortgage Applications (SA, 3/16/90=100) 07/12/13 07/05/13 06/28/13 Y/Y% 2012 2011 2010
Total Market Index 519.4 533.3 555.5 -44.5 813.8 572.3 659.3
 Purchase 202.7 201.7 208.2 5.4 187.8 182.6 199.8
 Refinancing 2,351.7 2,454.6 2,568.3 -55.7 4,505.0 2,858.4 3,348.1
15-Year Mortgage Effective Interest Rate (%) 3.80 3.86 3.75 3.23
3.25 3.97 4.39
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