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Economy in Brief

U.S. Mortgage Loan Applications Ease as Refinancings Weaken
by Tom Moeller  April 5, 2017

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index fell 1.6% last week (-16.0% y/y) following a 0.8% decline during the week prior. Refinancing applications declined 4.2% (-33.3% y/y) following a 2.9% drop, but purchase applications improved 0.7% (7.5% y/y) after a 1.2% increase.

The effective interest rate on a 15-year mortgage of 3.66% remained higher than the July 2016 low of 2.97%. The effective rate on a 30-year fixed-rate loan of 4.43% was higher than the 3.70% low in early-July last year. The rate on a Jumbo 30-year loan of 4.31 % was higher than last year's low of 3.68%. For adjustable 5-year mortgages, the effective interest rate of 3.38% fell w/w, but was higher than the 2.87% low early in July of last year.

The average mortgage loan size rose w/w to $286,900 (2.9% y/y). For purchases, it increased to $318,200 (5.6% y/y); for refinancings, it declined to $244,800 (-5.8% y/y).

Applications for variable interest rate loans increased 50.4% y/y while applications for fixed rate loans declined 19.3% 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) 03/31/17 03/24/17 03/17/17 Y/Y 2016 2015 2014
Total Market Index -1.6 -0.8 -2.7 -16.0 15.6 17.9 -41.4
 Purchase 0.7 1.2 -2.1 7.5 13.3 15.5 -12.9
 Refinancing -4.2 -2.9 -3.3 -33.3 17.3 19.7 -52.8
15-Year Mortgage Effective Interest Rate (%) 3.66 3.68 3.77 3.27 (Mar '16) 3.22 3.37 3.54
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