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Economy in Brief

U.S. Mortgage Loan Applications Slip; Interest Rates Notch Higher
by Tom Moeller  January 28, 2015

The Mortgage Bankers Association reported that their total Mortgage Market Volume Index edged down 3.2% last week (+34.9% y/y) following the near-doubling during the prior three weeks. Applications to refinance retreated 5.1% (+58.4% y/y) after a 136.1% rise during the prior three weeks. Home purchase applications remained stable (2.1% y/y) after a 25.8% three week increase.

The effective interest rate on a 15-year mortgage moved up to 3.22% following its sharp decline during the last four months from 3.63%. The effective rate on a 30-year fixed rate loan fell to 3.91% from 4.49% during that period. The rate on a Jumbo 30-year loan ticked up to 3.97%, but remained down from 4.36%. For adjustable 5-year mortgages, the effective interest rate backed up to 3.11% but remained down from the 2013 peak of 3.74%.

The average mortgage loan size fell back to $272,400 (+23.4% y/y). For home purchases, it slipped to $284,300 (+7.8% y/y) and for refinancings it fell to $267,600 (38.0% y/y).

Applications for fixed interest rate loans remained more than one-third higher y/y. Adjustable rate loan applications improved 12.1% 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) 01/23/15 01/16/15 01/09/15 Y/Y % 2014 2013 2012
Total Market Index 544.2 561.9 492.0 34.9 361.5 616.6 813.8
 Purchase 191.6 191.7 192.9 2.1 172.1 197.5 187.8
 Refinancing 2,605.4 2,746.1 2,2111.4 58.4 1,449.8 3,070.0 4,505.0
15-Year Mortgage Effective Interest Rate (%) 3.22 3.17 3.24 3.74
3.54 3.42 3.25
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