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Economy in Brief

U.S. Mortgage Loan Applications Firm as Interest Rates Decline
by Tom Moeller  April 6, 2016

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index increased 2.7% last week (3.4% y/y), following three weeks of decline. Refinancing applications jumped 6.8% (-1.9% y/y) after six weeks of sharp decline. Purchase applications fell 2.4% (+10.6% y/y) following a 2.1% increase.

The effective interest rate on a 15-year mortgage fell to 3.2%, and remained down from the 3.5% highs of November and December. The effective rate on a 30-year fixed-rate loan of 4.0% also was lower versus 4.3% near year-end. The rate on a Jumbo 30-year loan similarly remained down at 3.8%. For adjustable 5-year mortgages, the effective interest rate declined to 3.0%.

The average mortgage loan size improved to $278,700 (3.9% y/y). For purchases, it eased to $301,400 (+3.0% y/y); for refinancings, it increased to $259,800 (3.8% y/y).

Applications for fixed interest rate loans increased 3.8% y/y, while adjustable-rate loan applications declined 11.0% 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.

The minutes to the latest FOMC meeting can be found here.

MBA Mortgage Applications (%, SA) 04/01/16 03/25/16 03/18/16 Y/Y 2015 2014 2013
Total Market Index 2.7 -1.0 -3.3 3.4 17.9 -41.4 -24.2
 Purchase -2.4 2.1 -1.0 10.6 15.5 -12.9 5.2
 Refinancing 6.8 -3.3 -4.9 -1.9 -19.7 -52.8 -31.9
15-Year Mortgage Effective Interest Rate (%) 3.19 3.27 3.27 3.31 3.37 3.54 3.42
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