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Economy in Brief

U.S. Mortgage Loan Applications Decline With Fewer Refinancings
by Tom Moeller  April 9, 2014

The Mortgage Bankers Association reported that their total Mortgage Market Volume Index fell 1.6% last week (-57.5% y/y) following an unrevised 1.2% drop during the prior week. Applications were roughly two-thirds below the peak in September 2012. Applications to refinance a loan declined 4.9% (-70.3% y/y) while home purchase applications increased 2.7% (-14.0% y/y), the fifth rise in the last six weeks.

The effective interest rate on a 15-year mortgage was roughly stable at 3.70% but still was higher versus the 2.89% low early in May of 2013. The effective rate on a 30-year fixed rate loan remained at 4.65% last week, up from 3.68% last May. The rate on a Jumbo 30-year loan of 4.53% compared to a low of 3.85%. For adjustable 5-year mortgages, the effective interest rate at 3.44% remained up from its low of 2.59% at the beginning of May 2013.

The average mortgage loan size ticked up to $236,500. The average loan size for home purchases slipped to $272,700 last week and for refinancings it held steady at $201,300.

Applications for fixed interest rate loans declined 59.2% y/y while adjustable rate loan applications were off 20.8% 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 minutes of the latest FOMC meeting can be found here.

MBA Mortgage Applications (SA, 3/16/90=100) 04/04/14 03/28/14 03/21/14 Y/Y% 2013 2012 2011
Total Market Index 351.0 356.7 361.2 -57.5 616.6 813.8 572.3
 Purchase 180.3 175.6 174.0 -14.0 197.5 187.8 182.6
 Refinancing 1,322.9 1,391.3 1,432.2 -70.3 3,070.0 4,505.0 2,858.4
15-Year Mortgage Effective Interest Rate (%) 3.70 3.68 3.68 2.97
3.42 3.25 3.97
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