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Economy in Brief

U.S. Mortgage Loan Applications Decline
by Tom Moeller  September 21, 2016

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index declined 7.3% last week (+16.4% y/y) to the lowest level in four weeks. Purchase applications fell 6.8% (+3.2% y/y) following the prior week's 8.6% surge. Refinancing applications backpedaled 7.6%, up 26.0% y/y.

The effective interest rate on a 15-year mortgage improved to 3.07%, and 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 rose to 3.81%, but was down from 4.28% near year-end. The rate on a Jumbo 30-year loan increased to 3.78%. For adjustable 5-year mortgages, the effective interest rate rose to 3.06%, up from 2.87% nine weeks ago.

The average mortgage loan size declined to $278,100 (+2.5% y/y). For purchases it rose to $303,500 (2.2% y/y); for refinancings, it declined to $263,300 (+4.2% y/y).

Applications for fixed interest rate loans increased 19.6% y/y, while adjustable-rate loan applications declined 26.8% 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) 09/16/16 09/09/16 09/02/16 Y/Y 2015 2014 2013
Total Market Index -7.3 4.2 0.9 16.4 17.9 -41.4 -24.2
 Purchase -6.8 8.6 1.2 3.2 15.5 -12.9 5.2
 Refinancing -7.6 1.7 0.7 26.0 19.7 -52.8 -31.9
15-Year Mortgage Effective Interest Rate (%) 3.07 3.05 3.04 3.43 3.37 3.54 3.42
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