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Economy in Brief

U.S. Mortgage Loan Applications Meander; Interest Rates Surge
by Tom Moeller  February 7, 2018

The Mortgage Bankers Association reported that its total Mortgage Applications Volume Index rose 0.7% last week (5.8% y/y) following a 2.6% decline during the prior week. Purchase loan applications were stable (9.3% y/y) following a 3.4% shortfall. Applications to refinance increased 0.9% (1.8% y/y) following a 2.9% drop.

The effective interest rate on a 15-year mortgage jumped to 4.09%, up sharply from 3.76% four weeks ago. The effective rate on a 30-year fixed-rate loan increased to 4.66%. The rate on a Jumbo 30-year loan rose to 4.60%. For adjustable 5-year mortgages, the effective interest rate was fairly stable w/w at 3.92%, up from 3.69% four weeks ago.

The average mortgage loan size increased to $292,500, up 6.0% y/y. For purchases, the average loan size rose to $318,900 (2.9% y/y); for refinancings, it was steady at $261,800 (9.4% y/y).

Applications for adjustable-rate loans declined 7.0% y/y, while applications for fixed-rate loans rose 6.7% 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) 02/02/18 01/26/18 01/19/18 Y/Y 2017 2016 2015
Total Market Index 0.7 -2.6 4.5 5.8 -17.8 15.6 17.9
 Purchase -0.0 -3.4 6.1 9.3 5.6 13.3 15.5
 Refinancing 0.9 -2.9 0.9 1.8 -34.0 17.3 19.7
15-Year Mortgage Effective Interest Rate (%) 4.09 4.00 3.93 3.65 (Jan'17) 3.59 3.22 3.37
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