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Economy in Brief

U.S. Mortgage Loan Applications Rise as Financing Costs Decline
by Tom Moeller  September 13, 2017

The Mortgage Bankers Association reported that its total Mortgage Applications Volume Index jumped 9.9% (-19.3% y/y) in the week ended September 8 following a 3.3% rise in the prior week. Purchase applications increased 10.9% (6.2% y/y) following a 1.4% rise. Applications to refinance gained 8.9% after a 5.1% improvement, but still were down by roughly one-third y/y.

The effective interest rate on a 15-year mortgage eased to 3.40%, its lowest level since last November. The effective rate on a 30-year fixed-rate loan slipped to 4.15%. The rate on a Jumbo 30-year loan rose slightly to 4.07%. For adjustable 5-year mortgages, the effective interest rate remained low at 3.31%.

The average mortgage loan size increased to $300,300, up 6.2% y/y. For purchases, loan size eased to $306,800 (+2.5% y/y); for refinancings, it jumped to $294,000 (7.7% y/y).

Applications for adjustable rate loans rose 17.3% y/y, while applications for fixed rate loans fell 21.1% 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) 09/08/17 09/01/17 08/25/17 Y/Y 2016 2015 2014
Total Market Index 9.9 3.3 -2.3 -19.3 15.6 17.9 -41.4
 Purchase 10.9 1.4 -2.7 6.2 13.3 15.5 -12.9
 Refinancing 8.9 5.1 -2.0 -34.5 17.3 19.7 -52.8
15-Year Mortgage Effective Interest Rate (%) 3.40 3.44 3.46 3.04 (Sep. '16) 3.22 3.37 3.54
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