Global| Apr 16 2014U.S. Mortgage Loan Applications Rebound as Interest Rates Decline
by:Tom Moeller
|in:Economy in Brief
Summary
The Mortgage Bankers Association reported that their total Mortgage Market Volume Index jumped 4.3% last week (-57.7% y/y) to the highest level in four weeks. Applications nevertheless remained two-thirds below the peak in September [...]
The Mortgage Bankers Association reported that their total Mortgage Market Volume Index jumped 4.3% last week (-57.7% y/y) to the highest level in four weeks. Applications nevertheless remained two-thirds below the peak in September 2012. Applications to refinance a loan jumped 6.9% (-69.8% y/y) while home purchase applications increased 1.3% (-16.1% y/y), the sixth rise in the last seven weeks.
The effective interest rate on a 15-year mortgage fell to 3.60%, the lowest level in four weeks. The effective rate on a 30-year fixed rate loan declined to 4.56% but still was up from 3.68% last May. The rate on a Jumbo 30-year loan of 4.44% compared to a low of 3.85%. For adjustable 5-year mortgages, the effective interest rate at 3.30% was the lowest in a month.
The average mortgage loan size increased to $240,800, the highest level since late-2008. The average loan size for home purchases rose to $276,200 and for refinancings it rose to $208,000.
Applications for fixed interest rate loans declined 59.3% y/y while adjustable rate loan applications were off 26.9% 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.
| MBA Mortgage Applications (SA, 3/16/90=100) | 04/11/14 | 04/04/14 | 03/28/14 | Y/Y% | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 366.1 | 351.0 | 356.7 | -57.7 | 616.6 | 813.8 | 572.3 |
| Purchase | 182.7 | 180.3 | 175.6 | -16.1 | 197.5 | 187.8 | 182.6 |
| Refinancing | 1,414.4 | 1,322.9 | 1,391.3 | -69.8 | 3,070.0 | 4,505.0 | 2,858.4 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.60 | 3.70 | 3.68 | 2.97 (4/13) |
3.42 | 3.25 | 3.97 |
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.
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