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Economy in Brief

U.S. Mortgage Loan Applications and Interest Rates Move Lower
by Tom Moeller  July 2, 2014

The Mortgage Bankers Association reported that their total Mortgage Market Volume Index edged 0.2% lower last week (-37.5% y/y) and added to declines during the prior two weeks. Applications remained two-thirds below the peak in September 2012. Home purchase applications fell 0.7% (-15.9% y/y) while applications to refinance an existing loan were stable (-48.5% y/y).

The effective interest rate on a 15-year mortgage declined last week to 3.46%, the lowest level since late-May. The effective rate on a 30-year fixed rate loan fell to 4.32%. The rate on a Jumbo 30-year loan slipped to 4.28%. For adjustable 5-year mortgages, the effective interest rate held steady at 3.33%, its highest level since early-May.

The average mortgage loan size rose to $246,600. The average loan size for home purchases held fairly steady at $276,200 but for refinancings it rose to $219,800.

Applications for fixed interest rate loans declined 37.6% y/y while adjustable rate loan applications were off by 36.3% 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.

MBA Mortgage Applications (SA, 3/16/90=100) 06/27/14 06/20/14 06/13/14 Y/Y% 2013 2012 2011
Total Market Index 347.3 348.1 351.6 -37.5 616.6 813.8 572.3
 Purchase 175.2 176.4 178.6 -15.9 197.5 187.8 182.6
 Refinancing 1,323.9 1,322.6 1,334.0 -48.5 3,070.0 4,505.0 2,858.4
15-Year Mortgage Effective Interest Rate (%) 3.46 3.52 3.54 3.56
3.42 3.25 3.97
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