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Economy in Brief

U.S. Mortgage Loan Applications Jump as Interest Rates Fall
by Tom Moeller  January 14, 2015

The Mortgage Bankers Association reported that their total Mortgage Market Volume Index surged by nearly one-half last week (27.4% y/y) as interest rates fell sharply. Applications to purchase a home gained one-quarter (2.6% y/y) and applications to refinance increased by two-thirds (46.8% y/y).

The effective interest rate on a 15-year mortgage fell sharply to 3.24%, the lowest point since May 2013. The effective rate on a 30-year fixed rate loan also flopped to 3.95%. The rate on a Jumbo 30-year loan dropped to 3.94%. For adjustable 5-year mortgages, the effective interest rate fell to 3.11% and remained down versus last year's 3.74% peak.

The average mortgage loan size jumped to $281,700. For home purchases, it gained to $272,700. For refinancings it surged again to $285,500.

Applications for fixed interest rate loans jumped by roughly one-third y/y while adjustable rate loan applications fell 7.7% 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) 01/09/15 01/02/15 12/28/14 Y/Y % 2014 2013 2012
Total Market Index 492.0 329.9 296.9 27.4 361.5 616.6 813.8
 Purchase 196.7 159.2 152.4 2.6 172.1 197.5 187.8
 Refinancing 2,245.8 1,349.3 1,162.9 46.8 1,449.8 3,070.0 4,505.0
15-Year Mortgage Effective Interest Rate (%) 3.24 3.32 3.40 3.74
(1/14)
3.54 3.42 3.25
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