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Economy in Brief

U.S. Mortgage Loan Applications Ease as Rates Rise Further
by Tom Moeller  December 7, 2016

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index declined 0.7% last week (-2.4% y/y) to the lowest level since the first week of January. Refinancing applications fell 0.7% (-7.1% y/y), also to the January low. Purchase applications increased 0.4% (2.8% y/y) to the highest since early July.

The effective interest rate on a 15-year mortgage rose to 3.62%, up from the July low of 2.97%. The effective rate on a 30-year fixed-rate loan rose to 4.38%, up from the 3.70% low early in July. The rate on a Jumbo 30-year loan increased to 4.31%. For adjustable 5-year mortgages, the effective interest rate of 3.49% was higher than 2.87% early in July.

The average mortgage loan size fell to $270,100, down 0.3% y/y. For purchases, it declined $301,500 (+2.2% y/y); for refinancings, it declined to $245,700 (-3.2% y/y).

Applications for fixed interest rate loans eased 2.1% y/y, while adjustable-rate loan applications declined 6.2% 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) 12/02/16 11/25/16 11/18/16 Y/Y 2015 2014 2013
Total Market Index -0.7 -9.4 5.5 -2.4 17.9 -41.4 -24.2
 Purchase 0.4 -0.2 18.8 2.8 15.5 -12.9 5.2
 Refinancing -0.7 -16.2 -3.1 -7.1 19.7 -52.8 -31.9
15-Year Mortgage Effective Interest Rate (%) 3.62 3.56 3.43 3.50 (Dec. '15) 3.37 3.54 3.42
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