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Economy in Brief

U.S. Mortgage Loan Applications Recover as Interest Rates Fall
by Tom Moeller  October 30, 2013

The Mortgage Bankers Association reported that their total mortgage market index jumped 6.4% last week but still was down 40.1% year-to-year. Home purchase mortgage applications increased 2.3% last week (-0.4% y/y) but remained 16.4% below the early-May peak. Applications to refinance an existing loan surged 8.7% but remained down by one-half versus October 2012.

The effective interest rate on a 15-year mortgage again declined last week to 3.50%, down 43 basis points from its early-September high. It still was up, however, versus the early-May low of 2.89%. The effective rate on a 30-year fixed rate loan fell to 4.40% last week while the rate on a Jumbo 30-year loan declined to 4.44%. The effective interest rate on an adjustable 5-year mortgage also slipped w/w to 3.31% but remained up from its low of 2.59% at the beginning of May.

Applications for fixed interest rate loans fell by 41.7% y/y while adjustable rate loan applications declined 3.1% y/y. The average mortgage loan size was $223,800. The average size loan for home purchases fell to $259,300 last week while refinancings it rose to $205,900.

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. The 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) 10/25/13 10/18/13 10/11/13 Y/Y% 2012 2011 2010
Total Market Index 483.7 454.5 457.1 -40.1 813.8 572.3 659.3
 Purchase 184.5 180.3 179.0 -0.4 187.8 182.6 199.8
 Refinancing 2,211.3 2,034.4 2,060.8 -50.5 4,505.0 2,858.4 3,348.1
15-Year Mortgage Effective Interest Rate (%) 3.50 3.58 3.60 3.01
3.25 3.97 4.39
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