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Economy in Brief

U.S. Mortgage Loan Applications Improve; Interest Rates Are Stable
by Tom Moeller  February 4, 2015

The Mortgage Bankers Association reported that their total Mortgage Market Volume Index notched 1.3% higher last week (36.0% y/y) following a slip during the prior week. Refinance applications rose 2.5% (57.7% y/y) and reversed half of the prior week's decline. Home purchase applications fell 2.3% (+3.7% y/y) to the lowest level in four weeks.

The effective interest rate on a 15-year mortgage held steady at 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 3.87% from 4.49% during that period. The rate on a Jumbo 30-year loan declined to 3.88%, down from a high of 4.36%. For adjustable 5-year mortgages, the effective interest rate rose to 3.18%, but remained down from the 2013 peak of 3.74%.

The average mortgage loan size fell back to $264,900 (+15.2% y/y). For home purchases, it was fairly steady at $287,000 (+3.9% y/y) and for refinancings it fell to $256,600 (+27.2% y/y).

Applications for fixed interest rate loans remained more than one-third higher y/y. Adjustable rate loan applications declined 2.6% 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) 01/30/15 01/23/15 01/16/15 Y/Y % 2014 2013 2012
Total Market Index 551.2 544.2 561.9 36.0 361.5 616.6 813.8
 Purchase 187.2 191.6 191.7 3.7 172.1 197.5 187.8
 Refinancing 2,669.9 2,605.4 2,746.1 57.7 1,449.8 3,070.0 4,505.0
15-Year Mortgage Effective Interest Rate (%) 3.22 3.22 3.17 3.74
3.54 3.42 3.25
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