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Economy in Brief

U.S. Mortgage Loan Applications Recover as Interest Rates Remain Low
by Tom Moeller  October 21, 2015

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index rose 11.8% (-5.9%) following two weeks of extreme volatility. During those weeks, applications first rose by one-quarter then fell by a like amount. The Association indicated that the volatility was caused by new mortgage disclosure rules for lenders which took effect on October 3. Home purchase applications gained 16.4% last week (8.7% y/y). Applications to refinance a mortgage loan increased 8.8% (-13.8% y/y).

The effective interest rate on a 15-year mortgage eased to 3.28%, the lowest point since early-May. The effective rate on a 30-year fixed rate loan fell w/w to 4.08% and the rate on a Jumbo 30-year loan slipped to 3.95%. For adjustable 5-year mortgages, the effective interest rate declined to 3.07%.

The average mortgage loan size fell to $276,400 (-7.5% y/y. For purchases, it was little changed at $296,200 (+3.9% y/y) but for refinancings it declined to $263,000 (-14.2% y/y).

Applications for fixed interest rate loans increased 7.6% y/y, while adjustable rate loan applications fell roughly one-quarter 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) 10/16/15 10/09/15 10/02/15 Y/Y % 2014 2013 2012
Total Market Index 432.7 387.0 534.2 -5.9 361.5 616.6 813.8
 Purchase 197.4 169.6 257.4 8.7 172.1 197.5 187.8
 Refinancing 1,774.7 1,631.4 2,106.2 -13.8 1,449.8 3,070.0 4,505.0
15-Year Mortgage Effective Interest Rate (%) 3.28 3.30 3.33 3.44
(10/14)
3.54 3.42 3.25
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