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Economy in Brief

U.S. Mortgage Applications & Interest Rates Are Little Changed
by Tom Moeller  April 22, 2020

• The housing market remains weak.

• Financing rates are low.

The Mortgage Bankers Association reported that its Mortgage Loan Application Index eased 0.3% (+70.0% y/y) in the week ended April 17 after the prior week's 7.3% increase. Applications for refinancing slipped 0.8% w/w (+225.3% y/y) after improving 10.1% in the previous week. Purchase applications increased 2.1% w/w but fell by roughly one-third y/y.

The effective interest rate on a 15-year fixed-rate mortgage of 3.12% was little changed over the last three weeks. The effective interest rate on the 30-year fixed-rate mortgage of 3.54% was close to the record low for the series which dates back to 1990. The effective rate on a 30-year Jumbo mortgage edged up to 3.91% from 3.87%. The rate on the 5-year adjustable rate mortgage declined to 3.23% and reversed the increases of the prior five weeks.

The average mortgage loan size declined to $305,800 (-6.3% y/y). That was down from the $367,900 high reached early in March. The average loan size of refinancings fell sharply to $301,600 (-2.9% y/y) from $372,100, a high last month. The average loan size for purchases rose slightly to $318,500 (-5.4% y/y) but also was below its early-March high.

Home buyers and owners continue to lock in currently low levels of interest rates. Applications for fixed-rate loans increased 87.5% y/y, while applications for adjustable rate loans fell 21.3% 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) 04/17/20 04/10/20 04/03/20 Y/Y 2019 2018 2017
Total Market Index -0.3 7.3 -17.9 70.0 32.4 -10.4 -17.8
  Purchase 2.1 -1.8 -12.2 -31.1 6.6 2.1 5.6
  Refinancing -0.8 10.1 -19.4 225.3 71.1 -24.3 -34.0
15-Year Effective Mortgage Interest Rate (%) 3.12 3.11 3.10 3.98 3.71 4.35 3.59
30-Year Effective Mortgage Interest Rate (%) 3.54 3.53 3.57 4.59 4.34 4.94 4.32
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