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Economy in Brief

U.S. Mortgage Applications for Loan Refinance Increase
by Tom Moeller  February 12, 2020

The Mortgage Bankers Association reported that its Mortgage Loan Index increased 1.1% during the week of February 7 following two weeks of strong gain. Applications to refinance a loan strengthened 5.0% (206.5% y/y) and added to the prior week's 15.3% rise. Purchase applications declined 5.8% (+16.8% y/y), down for the second straight week.

The contract interest rate on a 30-year fixed-rate mortgage of 3.72% remained near the lowest reading since October 2016. This rate was below its high of 5.17% reached early in November 2018. The contract rate on a 15-year fixed-rate loan also was little changed w/w at 3.20%. The contract rate on a 30-year Jumbo mortgage edged higher to 3.75% from 3.70%. The interest rate on an adjustable rate mortgage eased to 3.21% and remained near the lowest level since September 2017.

The average mortgage loan size increased to $347,100 (12.5% y/y). The average loan size for purchases rose to $347,300 (10.6% y/y). The average loan size for refinancings increased to $347,000 (15.3% y/y).

Applications for fixed-rate loans surged 98.7% y/y while applications for adjustable rate loans strengthened 58.1% 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.

The Opportunities of a Tight Labor Market from Patrick T. Harker, President & CEO, Federal Reserve Bank of Philadelphia is available here.

MBA Mortgage Applications (%, SA) 02/07/20 01/31/20 01/24/20 Y/Y 2019 2018 2017
Total Market Index 1.1 5.0 7.2 95.5 32.4 -10.4 -17.8
  Purchase -5.8 -9.5 5.3 16.8 6.6 2.1 5.6
  Refinancing 5.0 15.3 7.5 206.5 71.1 -24.3 -34.0
30-Year Mortgage Contract Interest Rate (%) 3.72 3.71 3.81 4.66 (Feb.'19) 4.22 4.80 4.21
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