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Economy in Brief

U.S. Mortgage Loan Applications Fall to Four-Year Low; Interest Rates Steady
by Tom Moeller  November 7, 2018

The Mortgage Bankers Association reported that its total Mortgage Applications Index declined 4.0% (-16.4% y/y) last week to the lowest level since December 2014. The decline followed a 2.5% shortfall in the prior week. Purchase loan applications fell 5.0% (-0.2% y/y) after a 1.5% decline, while applications to refinance were off 2.5% (-33.2% y/y) following a 3.8% fall.

The effective interest rate on a 15-year fixed-rate mortgage was little changed w/w at 4.68%, but still was up sharply from 3.01% averaged in July 2016. The effective rate on a 30-year fixed-rate loan rose to 5.30%. The rate on a Jumbo 30-year loan was roughly stable at 5.05% and for adjustable 5-year mortgages, the effective interest rate was unchanged at 4.49%.

The average mortgage loan size was fairly steady at $292,800 (1.9% y/y). For purchases, the average loan size of $310,700 (-1.6% y/y) compared to $264,800 (2.7% y/y) for refinancings.

Applications for fixed-rate loans fell 19.9% y/y while applications for adjustable-rate loans declined 3.8% 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) 11/02/18 10/26/18 10/19/18 Y/Y 2017 2016 2015
Total Market Index -4.0 -2.5 4.9 -16.4 -17.8 15.6 17.9
 Purchase -5.0 -1.5 2.0 -0.2 5.6 13.3 15.5
 Refinancing -2.5 -3.8 9.7 -33.2 -34.0 17.3 19.7
15-Year Mortgage Effective Interest Rate (%) 4.68 4.67 4.64 3.65 (Nov'17) 3.59 3.22 3.47
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