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Economy in Brief

U.S. Mortgage Loan Applications Increase as Financing Remains Cheap
by Tom Moeller  August 27, 2014

The Mortgage Bankers Association reported that their total Mortgage Market Volume Index rose 2.8% last week (-19.9% y/y) after the prior week's 1.4% gain. Applications were at the highest level since early last month. Applications to refinance an existing loan improved 2.8% (-25.4% y/y) to the highest level since early June. Home purchase applications gained 2.6% (-11.1% y/y) to the highest level in four weeks.

The effective interest rate on a 15-year mortgage of 3.56% remained down from the 3.80% high averaged from July to September last year. The effective rate on a 30-year fixed rate loan remained unchanged at 4.36%, down versus last year's high of 4.79%. The rate on a Jumbo 30-year loan rose to 4.30% and recovered the prior week's dip. For adjustable 5-year mortgages, the effective interest rate ticked higher to 3.29% but was off versus last year's 3.58% peak.

The average mortgage loan size gained to $247,900. For home purchases, the average loan size rose w/w to $271,000 and for refinancings it increased w/w to $229,400.

Applications for fixed interest rate loans declined 20.4% y/y while adjustable rate loan applications were off by 13.0% 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) 08/22/14 08/15/14 08/08/14 Y/Y% 2013 2012 2011
Total Market Index 352.0 342.4 337.7 -19.9 616.6 813.8 572.3
 Purchase 168.4 164.1 164.8 -11.1 197.5 187.8 182.6
 Refinancing 1,396.2 1,358.0 1,322.2 -25.4 3,070.0 4,505.0 2,858.4
15-Year Mortgage Effective Interest Rate (%) 3.56 3.52 3.56 3.80
3.42 3.25 3.97
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