Global| Oct 07 2015U.S. Mortgage Loan Applications Surge as Interest Rates Fall Further
by:Tom Moeller
|in:Economy in Brief
Summary
The Mortgage Bankers Association reported that its total Mortgage Market Volume Index jumped 25.5% last week (52.4% y/y). It was the highest level of applications since late-January. Home purchase applications surged 27.4% (48.9% y/y) [...]
The Mortgage Bankers Association reported that its total Mortgage Market Volume Index jumped 25.5% last week (52.4% y/y). It was the highest level of applications since late-January. Home purchase applications surged 27.4% (48.9% y/y) to the highest level since early-2010. Applications to refinance a mortgage loan increased 24.2% (55.1% y/y).
The effective interest rate on a 15-year mortgage declined to 3.33%, the lowest point since mid-May. The effective rate on a 30-year fixed rate loan also fell w/w to 4.12% and the rate on a Jumbo 30-year loan eased to 3.97%. For adjustable 5-year mortgages, the effective interest rate held at 3.08%.
The average mortgage loan size jumped m/m to $289,800, up 17.7% y/y. For purchases, it was little-changed at $296,300 (7.7% y/y) but for refinancings it surged to $285,000 (27.2% y/y).
Applications for fixed interest rate loans increased roughly one-half y/y, while adjustable rate loan applications also rose by one-half 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 Economic Outlook: Live Long and Prosper from the Federal Reserve Bank of San Francisco is available here.
| MBA Mortgage Applications (SA, 3/16/90=100) | 10/02/15 | 09/25/15 | 09/18/15 | Y/Y % | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 534.2 | 425.5 | 456.1 | 52.4 | 361.5 | 616.6 | 813.8 |
| Purchase | 257.4 | 202.1 | 214.2 | 48.9 | 172.1 | 197.5 | 187.8 |
| Refinancing | 2,106.2 | 1,695.9 | 1,833.0 | 55.1 | 1,449.8 | 3,070.0 | 4,505.0 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.33 | 3.40 | 3.41 | 3.44 (10/14) |
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.
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