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Economy in Brief

U.S. Mortgage Applications Decline Sharply with Refinancings; Mortgage Rates Tick Higher
by Tom Moeller  August 21, 2013

Mortgage market activity continues to ease. The Mortgage Bankers Association reported that the total mortgage market index fell 4.6% (-45.2% y/y) last week. Applications to refinance an existing loan declined 7.7% (-57.1% y/y) and were down by two-thirds from the September peak. Home purchase mortgage applications inched up 1.2% (4.2% y/y) but they've fallen 16.2% since the early-May peak.

The effective interest rate on a 15-year mortgage backed up last week to 3.79%. That compared to the early-May low of 2.89%. The effective rate on a 30-year fixed rate loan also increased to 4.80% last week while the rate on a Jumbo 30-year loan rose to 4.82%. The 101 basis point spread between 15- and 30-year loan rates set a new record. The effective interest rate on an adjustable 5-year mortgage jumped w/w to 3.61% and remained up from its low of 2.59% at the beginning of May.

Applications for fixed interest rate loans fell by 46.4% y/y while adjustable rate loan applications were off 16.9% y/y. The average mortgage loan size was $215,00. The average size loan for home purchases was $253,900 last week while for refinancings it was $191,600.

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) 08/16/13 08/09/13 08/02/13 Y/Y% 2012 2011 2010
Total Market Index 450.4 471.9 495.4 -45.2 813.8 572.3 659.3
 Purchase 184.9 182.7 193.1 4.2 187.8 182.6 199.8
 Refinancing 1,979.6 2,145.3 2,244.7 -57.1 4,505.0 2,858.4 3,348.1
15-Year Mortgage Effective Interest Rate (%) 3.79 3.69 3.77 3.22
3.25 3.97 4.39
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