U.S. Mortgage Loan Applications Rebound; Interest Rates Back Up

The Mortgage Bankers Association reported that their total Mortgage Market Volume Index gained 7.3% last week (-6.0% y/y) following two weeks of decline. Applications to refinance a loan rebounded 13.2% (-7.1% y/y) but purchase applications improved a lesser 1.3% (-4.5% y/y).

The effective interest rate on a 15-year mortgage nudged up w/w to 3.43% following two weeks of decline. The effective rate on a 30-year fixed rate loan also gained slightly to 4.19%. The rate on a Jumbo 30-year loan slipped to  4.11%. For adjustable 5-year mortgages, the effective interest rate of 3.18% was stable w/w and remained down versus last year's 3.74% peak.

The average mortgage loan size improved to $255,400. For home purchases, it declined to $276,000; for refinancings, it improved to $243,700.

Applications for fixed interest rate loans declined 4.8% y/y while adjustable rate loan applications fell 19.7% 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 Federal Government reported a $56.8 billion budget deficit during November compared to a $135.2 billion during November of last year. For the first two months of Fiscal Year 2015, the deficit of $178.5 billion compares to $-225.8 billion last year. For FY 2015, the Congressional Budget Office projects the budget deficit will total $469 billion compared to $483.4 billion last year, then rise to $556 billion in FY 2016

The decline in deficit so far this fiscal year occurred as outlays fell 4.0% y/y. Spending on income security dropped 17.7% y/y in the first two months of FY'15 with the improved economy and veterans benefits dropped 15.1% y/y. Medicare payments were off 8.4% y/y and national defense outlays fell 7.2% y/y. To the upside was spending on health care programs by 17.6% y/y and spending on education, training & social services by 15.6% y/y. Net interest spending rose 5.8% y/y and social security spending increased 4.3% y/y. 

Net revenues so far in FY 2015 increased 6.0% y/y. Corporate income taxes surged by more than three-quarters y/y. Individual income taxes rose 5.9% y/y and social insurance taxes gained 3.9%. Excise taxes increased 3.1% y/y.

Haver's basic data on Federal Government outlays and receipts are contained in USECON. Considerable detail is given in the separate GOVFIN database.