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Economy in Brief

U.S. Mortgage Loan Applications Stabilize
by Tom Moeller  January 4, 2017

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index was little changed last week (9.1% y/y) following a 12.1% drop during the week prior. Since their peak early in July, applications have fallen by roughly one-third. Refinancing applications gained 1.7% w/w, yet were off by nearly two-thirds versus the level early in July. Purchase applications fell 1.4% (+16.2% y/y).

The effective interest rate on a 15-year mortgage was stable at 3.74%, but was higher than the July low of 2.97%. The effective rate on a 30-year fixed-rate loan of 4.54% was up from the 3.70% low in early-July. The rate on a Jumbo 30-year loan increased to 4.50%. For adjustable 5-year mortgages, the effective interest rate of 3.44% was higher than 2.87% roughly six months ago.

The average mortgage loan size declined sharply to $254,200 (+3.0% y/y). For purchases, it fell to $285,900 (+3.2% y/y); for refinancings, it dropped to $225,300 (+1.2% 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) 12/30/16 12/23/16 12/16/16 Y/Y 2016 2015 2014
Total Market Index 0.1 -12.1 2.5 9.1 15.6 17.9 -41.4
 Purchase -1.4 -0.7 2.7 16.2 13.3 15.5 -12.9
 Refinancing 1.7 -23.2 3.0 1.5 17.3 19.7 -52.8
15-Year Mortgage Effective Interest Rate (%) 3.74 3.79 3.73 3.50 (Dec. '15) 3.22 3.37 3.54
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