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Economy in Brief

U.S. Mortgage Loan Applications Move Lower; Interest Rates Slip
by Tom Moeller  June 25, 2014

The Mortgage Bankers Association reported that their total Mortgage Market Volume Index declined 1.0% last week (-44.7% y/y) and added to the prior week's 9.2% skid. Applications remained two-thirds below the peak in September 2012. Applications to refinance an existing loan fell 0.9% (-56.5% y/y) while home purchase applications declined 1.2% (-17.9% y/y).

The effective interest rate on a 15-year mortgage slipped last week to 3.52% but still was near the highest level since early-May. The effective rate on a 30-year fixed rate loan fell to 4.39%. The rate on a Jumbo 30-year loan slipped to 4.32%. For adjustable 5-year mortgages, the effective interest rate edged up to 3.33%, its highest level since early-May.

The average mortgage loan size fell back to $244,500. The average loan size for home purchases declined to $276,800 but for refinancings it was roughly stable at $214,900.

Applications for fixed interest rate loans declined 45.0% y/y while adjustable rate loan applications were off by 40.9% y/y.

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) 06/20/14 06/13/14 06/06/14 Y/Y% 2013 2012 2011
Total Market Index 348.1 351.6 387.1 -44.7 616.6 813.8 572.3
 Purchase 176.4 178.6 187.5 -17.9 197.5 187.8 182.6
 Refinancing 1,322.6 1,334.0 1,528.9 -56.5 3,070.0 4,505.0 2,858.4
15-Year Mortgage Effective Interest Rate (%) 3.52 3.54 3.49 3.56
3.42 3.25 3.97
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