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Economy in Brief

U.S. Mortgage Loan Applications Rise With Higher Interest Rates
by Tom Moeller  January 8, 2014

The Mortgage Bankers Association reported that their total mortgage market index improved 2.6% last week (-52.5% y/y) but remained near the lowest level since late-2000. Applications to refinance existing loans gained 4.6% last week but remained down by roughly two-thirds versus January 2013. Home purchase mortgage applications slipped 0.5% w/w (-7.4% y/y).

The effective interest rate on a 15-year mortgage ticked higher last week to 3.85%. That's up from 3.50% late in October and higher than 2.89% early in May of last year. The rate remained slightly below the high of 3.93% late in August of last year. The effective rate on a 30-year fixed rate loan held at 4.80% last week while the rate on a Jumbo 30-year loan slipped to 4.69%. The effective interest rate on an adjustable 5-year mortgage was stable w/w at 3.49%, up from its low of 2.59% at the beginning of May last year.

Applications for fixed interest rate loans dropped 54.7% y/y while adjustable rate loan applications increased 15.1% y/y. The average mortgage loan size dropped sharply to $216,300. The average loan size for home purchases declined to $253,800 last week while for refinancings it fell to $194,500.

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) 01/03/14 12/27/13 12/20/13 Y/Y% 2013 2012 2011
Total Market Index 345.1 336.4 351.1 -52.5 616.6 813.8 572.3
 Purchase 171.9 172.7 168.6 -17.4 197.5 187.8 182.6
 Refinancing 1,375.6 1,315.1 1,444.3 -65.2 3,070.0 4,505.0 2,858.4
15-Year Mortgage Effective Interest Rate (%) 3.85 3.83 3.82 2.99
(1/13)
3.42 3.25 3.97
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