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Economy in Brief

U.S. Mortgage Applications and Interest Rates Ease
by Tom Moeller  November 6, 2019

The Mortgage Bankers Association reported that its Mortgage Loan Index slipped 0.1% (+58.5% y/y) in the week ending November 1 after rising 0.6% w/w in the previous week. Purchase applications fell 2.5% w/w (+6.6% y/y) and reversed the prior week's increase. Applications to refinance rose 1.8% w/w (144.0% y/y) after falling 0.5% during the prior week.

The effective interest rate on a 15-year fixed-rate mortgage slipped to 3.45% from 3.49% the previous week. These rates remain up from the 3.37% low in the second week of August. The effective rate on a 30-year fixed-rate loan fell to 4.09% from 4.15%. The effective rate on a 30-year Jumbo mortgage declined to 4.04% from 4.10%. The rate on an adjustable 5-year mortgage slipped 2 basis points to 3.50%. These rates remained above the 3.37% low reached early last month.

The average mortgage loan size was little changed w/w at $317,000 (+8.3% y/y), but has been trending lower since the peak of $381,700 late in March. The average loan size for purchases increased to $332,800 (7.1% y/y) and has been rising since July. For refinancings, the average loan size held steady w/w at $306,200 (+15.6%) after falling from its $438,900 peak late in March.

Applications for fixed-rate loans were up 63.0% y/y. Adjustable rate loan applications increased a lesser 5.3% 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 each index 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) 11/01/19 10/25/19 10/18/19 Y/Y 2018 2017 2016
Total Market Index -0.1 0.6 -11.9 58.5 -10.4 -17.8 15.6
  Purchase -2.5 2.3 -3.6 6.6 2.1 5.6 13.3
  Refinancing 1.8 -0.5 -17.1 144.0 -24.3 -34.0 17.3
15-Year Mortgage Effective Interest Rate (%) 3.45 3.49 3.48 4.67 (Nov.'18) 4.35 3.59 3.22
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