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Economy in Brief

U.S. Mortgage Loan Applications Decline as Interest Rates Move Higher
by Tom Moeller  September 24, 2014

The Mortgage Bankers Association reported that their total Mortgage Market Volume Index declined 4.1% last week (-25.1% y/y) following the prior week's 7.9% rise. Applications were near the lowest level of the economic recovery. Applications to refinance an existing loan dropped 7.0% (-31.3% y/y) after the prior period's 10.3% gain. Home purchase applications slipped 0.3% (-15.9% y/y) following the prior week's 4.8% increase.

The effective interest rate on a 15-year mortgage remained unchanged at 3.63% but was higher than the 3.51% low two weeks ago. The effective rate on a 30-year fixed rate loan moved higher to 4.49%, up versus the 4.32% low late last month. The rate on a Jumbo 30-year loan increased to 4.36%. For adjustable 5-year mortgages, the effective interest rate ticked up to 3.35% but remained down versus last year's 3.74% peak.

The average mortgage loan size was steady w/w at $242,600 but remained below the $253,800 May peak. For home purchases, the average loan size held at $270,400, down versus the $280,500 high. For refinancings, it declined w/w to $220,500, off from the $232,200 high.

Applications for fixed interest rate loans declined 26.1% y/y while adjustable rate loan applications were off 11.9% 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) 09/19/14 09/12/14 09/05/14 Y/Y% 2013 2012 2011
Total Market Index 338.4 352.9 327.2 -25.1 616.6 813.8 572.3
 Purchase 168.8 169.3 161.5 -15.9 197.5 187.8 182.6
 Refinancing 1,297.5 1,395.5 1,265.0 -31.3 3,070.0 4,505.0 2,858.4
15-Year Mortgage Effective Interest Rate (%) 3.63 3.63 3.51 3.80
3.42 3.25 3.97
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