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Economy in Brief

U.S. Home Mortgage Interest Rates Slip But So Too Do Mortgage Applications
by Tom Moeller  July 24, 2013

The Mortgage Bankers Association reported that the effective interest rate on a 15-year mortgage ticked lower again, last week to 3.72% from 3.80%. That remained up, however, from the early-May low of 2.89%. The rise in rates follows the increase in ten-year Treasury yields to 2.54% last week from the April low of 1.73%. The effective rate on a 30-year fixed rate loan slipped to 4.69% last week while the rate on a Jumbo 30-year loan moved lower to 4.77%. The 97 basis point spread between 15- and 30-year loan rates remained near the record. The effective interest rate on an adjustable 5-year mortgage fell w/w to 3.43% but remained up from its low of 2.59% at the beginning of May.

Despite the mortgage rate slip, total applications for a home mortgage fell another 1.2% last week (-45.6% y/y). Since early-May applications are down 45.7%. Home purchase mortgage applications fell 2.1% (+6.6% y/y) while applications to refinance an existing loan slipped 0.7% (-56.8% y/y.

Applications for fixed interest rate loans fell by 46.9% y/y while adjustable rate loan applications were off 15.1% y/y. The average mortgage loan size was $215,000. The average size loan for home purchases was $257,700 last week while for refinancings it was $190,000.

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) 07/19/13 07/12/13 07/05/13 Y/Y% 2012 2011 2010
Total Market Index 513.3 519.4 533.3 -45.6 813.8 572.3 659.3
 Purchase 198.5 202.7 201.7 6.6 187.8 182.6 199.8
 Refinancing 2,336.2 2,351.7 2,454.6 -56.8 4,505.0 2,858.4 3,348.1
15-Year Mortgage Effective Interest Rate (%) 3.72 3.80 3.86 3.23
3.25 3.97 4.39
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