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Economy in Brief

U.S. Mortgage Loan Applications Remain Firm With Lower Rates
by Tom Moeller  January 29, 2014

The Mortgage Bankers Association reported that their total mortgage market index slipped just 0.2% last week (-50.9% y/y) following firm gains during the prior three weeks. Applications have risen 19.9% since the end of last month. The gain over the last four week's was driven by a one-quarter increase (-62.7% y/y) in refinancings. Also firm were applications to purchase a home which gained 8.6% (-11.1% y/y) since the end of December.

The effective interest rate on a 15-year mortgage fell last week to 3.66% and remained below the high of 3.93% late in August of last year. That's still up, however, from 2.89% early in May of 2013. The effective rate on a 30-year fixed rate loan declined to 4.64% last week while the rate on a Jumbo 30-year loan fell to 4.54%. The effective interest rate on an adjustable 5-year mortgage held steady w/w at 3.37% and remained up from its low of 2.59% at the beginning of May last year.

Applications for fixed interest rate loans increased 21.8% (-52.6% y/y) during the last four weeks. Adjustable rate loan applications fell 1.2% (-6.1% y/y) since the end of December. The average mortgage loan size fell to $222,700. The average loan size for home purchases declined to $263,700 last week and for refinancings it fell to $193,900.

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) 01/24/14 01/17/14 01/10/14 Y/Y% 2013 2012 2011
Total Market Index 403.4 404.1 386.1 -50.9 616.6 813.8 572.3
 Purchase 187.6 184.8 191.7 -11.1 197.5 187.8 182.6
 Refinancing 1,645.2 1,682.1 1,530.3 -62.7 3,070.0 4,505.0 2,858.4
15-Year Mortgage Effective Interest Rate (%) 3.66 3.75 3.82 2.99
3.42 3.25 3.97
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