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Economy in Brief

U.S. Mortgage Loan Applications Post Another Strong Increase
by Tom Moeller  December 12, 2018

The Mortgage Bankers Association reported that its total Mortgage Applications Index rose 1.6% (-13.2% y/y) during the week ended December 7, the third consecutive monthly gain. Applications to purchase a home jumped 2.5% (3.3% y/y) after a 0.8% rise, while applications to refinance a mortgage increased 1.8% (-33.5% y/y) after a 6.2% improvement during the prior week.

The effective interest rate on a 15-year fixed-rate mortgage slipped w/w to 4.52%, down from a 4.71% high in early November. The rate remained above the 3.01% averaged in July 2016. The effective rate on a 30-year fixed-rate loan fell to 5.09%. The rate on a Jumbo 30-year loan eased to 4.89%, and for adjustable 5-year mortgages, the effective interest rate was little changed at 4.37%.

The average mortgage loan size increased to $292,200 (4.7% y/y). For purchases, the average loan size rose to $308,000 (0.8% y/y) compared to a higher $269,900 (5.9% y/y) for refinancings.

Applications for fixed-rate loans fell 15.1% y/y while applications for adjustable-rate loans increased 17.2% 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) 12/07/08 11/30/18 11/23/18 Y/Y 2017 2016 2015
Total Market Index 1.6 2.0 5.5 -13.2 -17.8 15.6 17.9
 Purchase 2.5 0.8 8.8 3.3 5.6 13.3 15.5
 Refinancing 1.8 6.2 0.5 -33.5 -34.0 17.3 19.7
15-Year Mortgage Effective Interest Rate (%) 4.52 4.65 4.65 3.72 (Dec.'17) 3.59 3.22 3.47
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