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Economy in Brief

U.S. Mortgage Loan Applications Continue to Decline As Interest Rates Rise
by Tom Moeller  October 17, 2018

The Mortgage Bankers Association reported that its total Mortgage Applications Index fell 7.1% (-23.3% y/y) in the week ending October 12 following a 1.7% fall during the prior week. Purchase loan applications declined 5.9% (-7.8% y/y), while applications to refinance fell 9.0% (-40.1% y/y).

The effective interest rate on a 15-year fixed-rate mortgage increased to 4.64%, up sharply from 3.01% averaged in July 2016. The effective rate on a 30-year fixed-rate loan increased to 5.26%. The rate on a Jumbo 30-year loan was steady at 5.08%. For adjustable 5-year mortgages, the effective interest rate was steady at 4.47%.

The average mortgage loan size eased to $288,400 (+1.9% y/y). For purchases, the average loan size declined to $306,300 (-1.2% y/y); for refinancings, it fell to $259,400 (+1.9% y/y).

Applications for fixed-rate loans fell 24.1% y/y while applications for adjustable-rate loans declined 10.8% 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) 10/12/18 10/05/18 09/28/18 Y/Y 2017 2016 2015
Total Market Index -7.1 -1.7 0.0 -23.3 -17.8 15.6 17.9
 Purchase -5.9 -1.1 0.1 -7.8 5.6 13.3 15.5
 Refinancing -9.0 -2.6 -0.1 -40.1 -34.0 17.3 19.7
15-Year Mortgage Effective Interest Rate (%) 4.64 4.58 4.52 3.57 (Oct'17) 3.59 3.22 3.47
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