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Economy in Brief

U.S. Mortgage Interest Rates Back Away From Recent High
by Tom Moeller  September 4, 2013

The Mortgage Bankers Association reported that recent upward pressure on mortgage interest rates eased last week. The effective interest rate on a 15-year mortgage slipped to 3.82% but remained near the highest level since July 2011. That compared to the early-May low of 2.89%. The effective rate on a 30-year fixed rate loan also slipped last week to 4.83% while the rate on a Jumbo 30-year loan fell to 4.78%. The effective interest rate on an adjustable 5-year mortgage rose was stable w/w at 3.62%, up from its low of 2.59% at the beginning of May.

Accompanying the slip in financing rates last week was a 1.3% rise (-42.0% y/y) in the Mortgage Bankers' Total Mortgage Market Index. Applications to refinance an existing loan edged up 2.4% (-54.6% y/y) but remained down by two-thirds from the September peak. Home purchase mortgage applications slipped 0.4% (+5.6% y/y), 14.5% below the early-May high.

Applications for fixed interest rate loans fell by 43.2% y/y while adjustable rate loan applications were off 17.6% y/y. The average mortgage loan size was $214,300. The average size loan for home purchases was $252,100 last week while for refinancings it was $190,400.

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) 08/30/13 08/23/13 08/16/13 Y/Y% 2012 2011 2010
Total Market Index 445.0 439.2 450.4 -42.0 813.8 572.3 659.3
 Purchase 188.6 189.4 184.9 5.6 187.8 182.6 199.8
 Refinancing 1,916.3 1,871.8 1,979.6 -54.6 4,505.0 2,858.4 3,348.1
15-Year Mortgage Effective Interest Rate (%) 3.82 3.93 3.79 3.22
3.25 3.97 4.39
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