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Economy in Brief

U.S. Mortgage Loan Applications Strengthen
by Tom Moeller  January 25, 2017

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index increased 4.0% last week (-15.9% y/y) following a 0.8% rise during the week prior. Purchase applications rebounded 6.0% (2.3% y/y) after a 5.2% fall. Refinancing applications improved 0.2% (-30.6% y/y) following a 6.8% increase.

The effective interest rate on a 15-year mortgage rose to 3.64%, but remained higher than the July low of 2.97%. The effective rate on a 30-year fixed-rate loan of 4.44% was higher than the 3.70% low in early-July. The rate on a Jumbo 30-year loan rose to 4.37%. For adjustable 5-year mortgages the effective interest rate of 3.52% was steady w/w, but higher than the 2.87% low early in July.

The average mortgage loan size rose w/w to $271,800 (-10.4% y/y). For purchases, it rose to $309,200 (3.4% y/y); for refinancings, it declined to $234,500 (-23.4% y/y).

Applications for fixed interest rate loans declined 14.9% y/y, while applications for variable interest rate loans fell 29.8% y/y.

The survey covers over 75% 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) 01/20/17 01/13/17 01/06/17 Y/Y 2016 2015 2014
Total Market Index 4.0 0.8 5.8 -15.9 15.6 17.9 -41.4
 Purchase 6.0 -5.2 6.1 2.3 13.3 15.5 -12.9
 Refinancing 0.2 6.8 4.4 -30.6 17.3 19.7 -52.8
15-Year Mortgage Effective Interest Rate (%) 3.64 3.60 3.66 3.43 (Jan '16) 3.22 3.37 3.54
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