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Economy in Brief

U.S. Mortgage Loan Applications Follow Home Purchases Lower
by Tom Moeller  February 26, 2014

A softer housing market has lessened the workload of mortgage bankers. The Mortgage Bankers Association reported that their total mortgage market index declined 8.5% last week (-53.7% y/y), the third consecutive week of sharp decline. Applications to purchase a home fell 3.5% (-14.9% y/y), the fourth straight weekly shortfall. Applications to refinance a loan were off 11.4% (-64.5% y/y), the second week of meaningful decline.

The effective interest rate on a 15-year mortgage held last week at 3.63%, up from 3.52% early in November. That' also higher than the 2.89% low early in May of 2013. The effective rate on a 30-year fixed rate loan ticked up to 4.62% last week while the rate on a Jumbo 30-year loan was roughly stable at 4.51%. The effective interest rate on an adjustable 5-year mortgage at 3.29% remained up from its low of 2.59% at the beginning of May last year.

Applications for fixed interest rate loans fell 55.5% y/y while adjustable rate loan applications fell 12.4% y/y. The average mortgage loan size retreated to $227,700. The average loan size for home purchases fell to $266,600 last week and for refinancings it declined to $199,900.

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) 02/21/14 02/14/14 02/07/14 Y/Y% 2013 2012 2011
Total Market Index 348.5 380.9 397.2 -53.7 616.6 813.8 572.3
 Purchase 155.0 160.7 171.5 -14.9 197.5 187.8 182.6
 Refinancing 1,457.2 1,644.5 1,690 -64.5 3,070.0 4,505.0 2,858.4
15-Year Mortgage Effective Interest Rate (%) 3.63 3.63 3.55 3.10
3.42 3.25 3.97
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