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Economy in Brief

U.S. Mortgage Loan Applications Jump as Interest Rates Remain Low
by Tom Moeller  September 14, 2016

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index increased 4.2% (43.0% y/y) last week following a 0.9% rise. Purchase applications surged 8.6% (20.9% y/y) and made up declines during July and August. Refinancing applications increased 1.7% and have risen by nearly two-thirds y/y. The Association reported that refinancings accounted for roughly two-thirds of applications.

The effective interest rate on a 15-year mortgage was little changed at 3.05%, but has risen slightly from last month's 2.98% low. Rates were down from the 3.50% highs of November and December. The effective rate on a 30-year fixed-rate loan was fairly steady at 3.77%, down from 4.28% near year-end. The rate on a Jumbo 30-year loan held steady at 3.74%. For adjustable 5-year mortgages, the effective interest rate rose to 3.01%, up from 2.87% nine weeks ago.

The average mortgage loan size increased to $282,800 (5.4% y/y). For purchases it rose to $299,400 (4.1% y/y); for refinancings, it increased to $273,000 (7.8% y/y).

Applications for fixed interest rate loans increased 46.3% y/y, while adjustable-rate loan applications declined 2.0% 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) 09/09/16 09/02/16 08/26/16 Y/Y 2015 2014 2013
Total Market Index 4.2 0.9 2.8 43.0 17.9 -41.4 -24.2
 Purchase 8.6 1.2 1.3 20.9 15.5 -12.9 5.2
 Refinancing 1.7 0.7 3.7 60.6 19.7 -52.8 -31.9
15-Year Mortgage Effective Interest Rate (%) 3.05 3.04 3.04 3.43 3.37 3.54 3.42
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