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Economy in Brief

U.S. Mortgage Loan Applications Decline as Interest Rates Tick Higher
by Tom Moeller  April 23, 2014

The Mortgage Bankers Association reported that their total Mortgage Market Volume Index declined 3.3% last week (-59.2% y/y) and reversed most of the prior week's increase. Applications remained two-thirds below the peak in September 2012. Applications to refinance a loan declined 3.7% (-71.0% y/y) while home purchase applications fell 2.6% (-18.5% y/y) to the lowest level in four weeks.

The effective interest rate on a 15-year mortgage inched up to 3.63%. The effective rate on a 30-year fixed rate loan was 4.63%, higher than the 3.68% last May. The rate on a Jumbo 30-year loan of 4.51% compared to a low of 3.85%. For adjustable 5-year mortgages, the effective interest rate at 3.30% remained the lowest in a month.

The average mortgage loan size increased to $244,000, the highest level since late-2008. The average loan size for home purchases rose to $280,500 and for refinancings it increased to $209,200.

Applications for fixed interest rate loans declined 61.0% y/y while adjustable rate loan applications were off 20.5% 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.

Evolving Market Perceptions of Federal Reserve Policy Objectives from the Federal Reserve Bank of Kansas City can be found here.

MBA Mortgage Applications (SA, 3/16/90=100) 04/18/14 04/11/14 04/04/14 Y/Y% 2013 2012 2011
Total Market Index 354.0 366.1 351.0 -59.2 616.6 813.8 572.3
 Purchase 178.0 182.7 180.3 -18.5 197.5 187.8 182.6
 Refinancing 1,361.4 1,414.4 1,322.9 -71.0 3,070.0 4,505.0 2,858.4
15-Year Mortgage Effective Interest Rate (%) 3.63 3.60 3.70 2.97
3.42 3.25 3.97
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