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Economy in Brief

U.S. Mortgage Loan Applications Move Higher as Interest Rates Collapse
by Tom Moeller  January 21, 2015

The Mortgage Bankers Association reported that their total Mortgage Market Volume Index rose another 14.2% last week (39.0% y/y) as interest rates fell sharply. Applications to refinance increased 22.3% (63.3% y/y) while home purchase applications dipped 2.5% (+3.7% y/y).

The effective interest rate on a 15-year mortgage dropped to 3.17%, the lowest point since May 2013. The effective rate on a 30-year fixed rate loan also fell to 3.88%. The rate on a Jumbo 30-year loan slipped to 3.92%. For adjustable 5-year mortgages, the effective interest rate fell sharply to 3.02% and remained down versus last year's 3.74% peak.

The average mortgage loan size jumped to $291,100 (29.8% y/y). For home purchases, it gained to $287,900 (8.1% y/y) and for refinancings it edged up to $292,200 (45.7% y/y).

Applications for fixed interest rate loans jumped by 40% y/y while adjustable rate loan applications recovered 23% 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.

The State of Young Adults' Balance Sheets: Evidence from the Survey of Consumer Finances from the Federal Reserve Bank of St. Louis can be found here.

MBA Mortgage Applications (SA, 3/16/90=100) 01/16/15 01/09/15 01/02/15 Y/Y % 2014 2013 2012
Total Market Index 561.9 492.0 329.9 39.0 361.5 616.6 813.8
 Purchase 191.7 196.7 159.2 3.7 172.1 197.5 187.8
 Refinancing 2,746.1 2,245.8 1,349.3 63.3 1,449.8 3,070.0 4,505.0
15-Year Mortgage Effective Interest Rate (%) 3.17 3.24 3.32 3.74
3.54 3.42 3.25
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