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Economy in Brief

U.S. Mortgage Loan Applications Decline Again as Rates Rise
by Tom Moeller  November 2, 2016

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index declined 1.2% last week (+17.4% y/y) following a 4.1% drop. Refinancing applications declined 1.6% (+23.3% y/y) following a 2.3% shortfall. Purchase applications eased 0.4% (+8.9% y/y) after a 6.9% fall.

The effective interest rate on a 15-year mortgage rose to 3.13 %, up from the July low of 2.97%. Rates remained down from the 3.50% highs of November and December. The effective rate on a 30-year fixed-rate loan rose to 3.85%, remaining down from 4.28% near year-end. The rate on a Jumbo 30-year loan was little-changed at 3.83%. For adjustable 5-year mortgages, the effective interest rate rose to 3.11%, and was higher than 2.87% early in July.

The average mortgage loan size rose to $280,500, up 2.8% y/y. For purchases, it eased to $307,500 (+2.6% y/y); for refinancings, it increased to $264,400 (3.7% y/y).

Applications for fixed interest rate loans increased 20.2% y/y, while adjustable-rate loan applications declined 22.0% 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) 10/28/16 10/21/16 10/14/16 Y/Y 2015 2014 2013
Total Market Index -1.2 -4.1 0.6 17.4 17.9 -41.4 -24.2
 Purchase -0.4 -6.9 3.0 8.9 15.5 -12.9 5.2
 Refinancing -1.6 -2.3 -0.8 23.3 19.7 -52.8 -31.9
15-Year Mortgage Effective Interest Rate (%) 3.13 3.08 3.09 3.31 (Oct '15) 3.37 3.54 3.42
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