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Economy in Brief

U.S. Mortgage Loan Applications Rise As Interest Rates Slip
by Tom Moeller  January 15, 2014

The Mortgage Bankers Association reported that their total mortgage market index rose 11.9% last week (-53.8% y/y) but remained near the lowest level since late-2000. Applications to purchase a home rose 11.5% (-8.5% y/y) while applications to refinance existing loans gained 11.2%, but remained down by two-thirds versus January 2013.

The effective interest rate on a 15-year mortgage edged lower last week to 3.82%. That's still 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 edged down to 4.75% last week while the rate on a Jumbo 30-year loan was roughly stable at 4.65%. The effective interest rate on an adjustable 5-year mortgage slipped w/w to 3.46% but remained up from its low of 2.59% at the beginning of May last year.

Applications for fixed interest rate loans dropped 56.1% y/y while adjustable rate loan applications increased 9.0% y/y. The average mortgage loan size recovered to $228,900. The average loan size for home purchases increased to $263,800 last week while for refinancings it recovered to $207,800.

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) 01/10/14 01/03/14 12/27/13 Y/Y% 2013 2012 2011
Total Market Index 386.1 345.1 336.4 -53.8 616.6 813.8 572.3
 Purchase 191.7 171.9 172.7 -8.5 197.5 187.8 182.6
 Refinancing 1,530.3 1,375.6 1,315.1 -66.5 3,070.0 4,505.0 2,858.4
15-Year Mortgage Effective Interest Rate (%) 3.82 3.85 3.83 2.99
3.42 3.25 3.97
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