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Economy in Brief

U.S. Mortgage Applications Slide; Interest Rates Are Mixed
by Tom Moeller  April 8, 2020

The Mortgage Bankers Association reported that its Mortgage Loan Application Index declined 17.9% (+51.0% y/y) in the week ended April 4 and reversed the prior week's 15.3% gain. Purchase applications dropped 12.2% w/w and by one-third y/y. Applications for refinancing fell 19.4% w/w (+143.5% y/y) after having risen by one-quarter in the previous week.

The effective interest rate on a 15-year fixed-rate mortgage slipped to 3.10% from 3.12% in the prior period. The effective interest rate on the 30-year fixed-rate mortgage held steady at 3.57%. The effective rate on a 30-year Jumbo mortgage rose to 3.95% from 3.93%. The rate on the 5-year adjustable rate mortgage increased to 3.38% from 3.34%.

The average mortgage loan size fell sharply to $313,200 from $323,700 in the previous week. The average loan size of refinancings declined to $312,400 from $322,800. The average loan size for purchases dropped to $315,300 from $326,500, the lowest price level since the second week of February 2019.

Applications for fixed-rate loans increased 58.1% y/y, while applications for adjustable rate loans fell 34.6% 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.

Working from Home During a Pandemic: It's Not for Everyone from the Federal Reserve Bank of Dallas is available here.

MBA Mortgage Applications (%, SA) 04/03/20 03/27/20 03/20/20 Y/Y 2019 2018 2017
Total Market Index -17.9 15.3 -29.4 51.0 32.4 -10.4 -17.8
  Purchase -12.2 -10.8 -14.6 -33.2 6.6 2.1 5.6
  Refinancing -19.4 25.5 -33.8 143.5 71.1 -24.3 -34.0
15-Year Effective Mortgage Interest Rate (%) 3.10 3.12 3.38 3.94 3.71 4.35 3.59
30-Year Effective Mortgage Interest Rate (%) 3.57 3.57 3.93 4.54 4.34 4.94 4.32
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