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Economy in Brief

U.S. Mortgage Loan Applications Decline To New Low
by Tom Moeller  September 10, 2014

The Mortgage Bankers Association reported that their total Mortgage Market Volume Index declined 7.2% last week (-15.0% y/y) after the prior week's 0.2% uptick. Applications were at the lowest level of the economic recovery. Applications to refinance an existing loan dropped 10.7% (-17.2% y/y) to the lowest level of the economic recovery. Home purchase applications fell 2.6% (-12.0% y/y) after the prior week's 1.5% decline.

The effective interest rate on a 15-year mortgage slipped to 3.51% but has moved sideways since May. The effective rate on a 30-year fixed rate loan remained fairly stable at 4.35%, down versus last year's high of 4.79%. The rate on a Jumbo 30-year loan declined to 4.22%, the lowest level since May of last year. For adjustable 5-year mortgages, the effective interest rate fell to 3.28% and was down versus last year's 3.58% peak.

The average mortgage loan size held fairly steady at $248,200. For home purchases, the average loan size fell w/w to $268,000. For refinancings, it jumped w/w to $232,200, the highest level since June 2012.

Applications for fixed interest rate loans declined 15.4% y/y while adjustable rate loan applications were off 10.0% 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.

Using the Federal Reserve's Beige Book to track economic activity from the Federal Reserve Bank of Chicago can be found here.

MBA Mortgage Applications (SA, 3/16/90=100) 09/05/14 08/29/14 08/22/14 Y/Y% 2013 2012 2011
Total Market Index 327.2 352.7 352.0 -15.0 616.6 813.8 572.3
 Purchase 161.5 165.8 168.4 -12.0 197.5 187.8 182.6
 Refinancing 1,265.0 1,415.8 1,396.2 -17.2 3,070.0 4,505.0 2,858.4
15-Year Mortgage Effective Interest Rate (%) 3.51 3.56 3.56 3.80
3.42 3.25 3.97
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