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Economy in Brief

U.S. Mortgage Loan Applications Move Sideways as Interest Rates Rise
by Tom Moeller  November 18, 2015

The recent rise in the cost of mortgage financing has muted the number loan applications. The Mortgage Bankers Association reported that its total Mortgage Market Volume Index increased 6.2% last week (10.7% y/y). The rise made up the prior week's decline and left this month's average near the August level. Last week's gain was paced by an 11.9% rise (18.6% y/y) in purchase applications which similarly have moved sideways since the summer. Refinancing applications rose 2.3% (5.6% y/y) but also remained steady with August.

The effective interest rate on a 15-year mortgage rose to 3.51%, up off the October low of 3.28% and even with July. The effective rate on a 30-year fixed rate loan rose w/w to 4.31% but the rate on a Jumbo 30-year loan held at 4.14%. For adjustable 5-year mortgages, the effective interest rate of 3.34% compared to 3.07% four weeks earlier.

The average mortgage loan size declined to $266,900 (+6.8% y/y. For purchases, it increased to $301,200 (7.8% y/y) but for refinancings, it fell sharply to $242,700 (+5.0% y/y).

Applications for fixed interest rate loans increased 11.6% y/y, while adjustable rate loan applications improved 1.0% 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) 11/13/15 11/06/15 10/31/15 Y/Y % 2014 2013 2012
Total Market Index 433.9 408.7 414.2 10.7 361.5 616.6 813.8
 Purchase 212.8 190.1 190.0 18.6 172.1 197.5 187.8
 Refinancing 1,694.8 1,656.2 1,692.9 5.6 1,449.8 3,070.0 4,505.0
15-Year Mortgage Effective Interest Rate (%) 3.51 3.44 3.33 3.42
3.54 3.42 3.25


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