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Economy in Brief

U.S. Mortgage Loan Applications Slip As Interest Rates Tick Higher
by Tom Moeller  November 5, 2014

The Mortgage Bankers Association reported that their total Mortgage Market Volume Index fell 2.6% last week (-20.0% y/y), the second week of decline. Applications to refinance an existing loan fell 5.5% (-23.7% y/y) following the prior week's 7.4% drop. Home purchase applications improved 2.6% (-13.1% y/y) following three weeks of decline.

The effective interest rate on a 15-year mortgage increased w/w to 3.46%, the highest level in three weeks. The effective rate on a 30-year fixed rate loan gained to 4.23% but remained down from 4.49% six weeks ago. The rate on a Jumbo 30-year loan held at 4.16%. For adjustable 5-year mortgages, the effective interest rate gained to 3.20% from 3.10%. It still was down, however, versus last year's 3.74% peak and near the lowest level since June 2013.

The average mortgage loan size pulled further back w/w to $256,200. For home purchases, it fell to $280,000; for refinancings, it declined to $242,200.

Applications for fixed interest rate loans declined 20.7% y/y while adjustable rate loan applications fell 9.8% 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) 10/31/14 10/24/14 10/17/14 Y/Y % 2013 2012 2011
Total Market Index 376.1 386.1 413.2 -20.0 616.6 813.8 572.3
 Purchase 159.2 155.2 163.4 -13.1 197.5 187.8 182.6
 Refinancing 1,621.2 1,715.3 1,852.3 -23.7 3,070.0 4,505.0 2,858.4
15-Year Mortgage Effective Interest Rate (%) 3.46 3.34 3.34 3.57
(10/13)
3.42 3.25 3.97
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