Global| Jan 21 2015U.S. Mortgage Loan Applications Move Higher as Interest Rates Collapse
by:Tom Moeller
|in:Economy in Brief
Summary
The Mortgage Bankers Association reported that their total Mortgage Market Volume Index rose another 14.2% last week (39.0% y/y) as interest rates fell sharply. Applications to refinance increased 22.3% (63.3% y/y) while home purchase [...]
The Mortgage Bankers Association reported that their total Mortgage Market Volume Index rose another 14.2% last week (39.0% y/y) as interest rates fell sharply. Applications to refinance increased 22.3% (63.3% y/y) while home purchase applications dipped 2.5% (+3.7% y/y).
The effective interest rate on a 15-year mortgage dropped to 3.17%, the lowest point since May 2013. The effective rate on a 30-year fixed rate loan also fell to 3.88%. The rate on a Jumbo 30-year loan slipped to 3.92%. For adjustable 5-year mortgages, the effective interest rate fell sharply to 3.02% and remained down versus last year's 3.74% peak.
The average mortgage loan size jumped to $291,100 (29.8% y/y). For home purchases, it gained to $287,900 (8.1% y/y) and for refinancings it edged up to $292,200 (45.7% y/y).
Applications for fixed interest rate loans jumped by 40% y/y while adjustable rate loan applications recovered 23% y/y.
The survey covers over 75 percent 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.
The State of Young Adults' Balance Sheets: Evidence from the Survey of Consumer Finances from the Federal Reserve Bank of St. Louis can be found here.
| MBA Mortgage Applications (SA, 3/16/90=100) | 01/16/15 | 01/09/15 | 01/02/15 | Y/Y % | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 561.9 | 492.0 | 329.9 | 39.0 | 361.5 | 616.6 | 813.8 |
| Purchase | 191.7 | 196.7 | 159.2 | 3.7 | 172.1 | 197.5 | 187.8 |
| Refinancing | 2,746.1 | 2,245.8 | 1,349.3 | 63.3 | 1,449.8 | 3,070.0 | 4,505.0 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.17 | 3.24 | 3.32 | 3.74 (1/14) |
3.54 | 3.42 | 3.25 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
