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Economy in Brief

U.S. Mortgage Loan Applications Retreat; Interest Rates Remain Low
by Tom Moeller  November 6, 2013

The Mortgage Bankers Association reported that their total mortgage market index pulled back 7.0% last week (-41.5% y/y) and reversed the prior week's increase. Applications to refinance an existing loan retreated 7.9% and remained down by one-half versus November 2012. Home purchase mortgage applications backpedaled 5.2% last week (-0.9% y/y) and were 20.7% below the early-May peak.

The effective interest rate on a 15-year mortgage again remained low last week at 3.52%, down 41 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 nudged up to 4.44% last week while the rate on a Jumbo 30-year loan was 4.45%. The effective interest rate on an adjustable 5-year mortgage fell sharply w/w to 3.19% but remained up from its low of 2.59% at the beginning of May.

Applications for fixed interest rate loans fell by 43.2% y/y while adjustable rate loan applications increased 4.0% y/y. The average mortgage loan size was $226,100. The average size loan for home purchases was $262,200 last week while for refinancings it was $207,600.

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. 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) 11/01/13 10/25/13 10/18/13 Y/Y% 2012 2011 2010
Total Market Index 449.6 483.7 454.5 -41.5 813.8 572.3 659.3
 Purchase 174.9 184.5 180.3 -0.9 187.8 182.6 199.8
 Refinancing 2,035.6 2,211.3 2,034.4 -52.0 4,505.0 2,858.4 3,348.1
15-Year Mortgage Effective Interest Rate (%) 3.52 3.50 3.58 2.98
(11/12)
3.25 3.97 4.39
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