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Economy in Brief

U.S. Mortgage Loan Applications Surge as Interest Rates Fall Further
by Tom Moeller  October 7, 2015

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index jumped 25.5% last week (52.4% y/y). It was the highest level of applications since late-January. Home purchase applications surged 27.4% (48.9% y/y) to the highest level since early-2010. Applications to refinance a mortgage loan increased 24.2% (55.1% y/y).

The effective interest rate on a 15-year mortgage declined to 3.33%, the lowest point since mid-May. The effective rate on a 30-year fixed rate loan also fell w/w to 4.12% and the rate on a Jumbo 30-year loan eased to 3.97%. For adjustable 5-year mortgages, the effective interest rate held at 3.08%.

The average mortgage loan size jumped m/m to $289,800, up 17.7% y/y. For purchases, it was little-changed at $296,300 (7.7% y/y) but for refinancings it surged to $285,000 (27.2% y/y).

Applications for fixed interest rate loans increased roughly one-half y/y, while adjustable rate loan applications also rose by one-half 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 Economic Outlook: Live Long and Prosper from the Federal Reserve Bank of San Francisco is available here.

MBA Mortgage Applications (SA, 3/16/90=100) 10/02/15 09/25/15 09/18/15 Y/Y % 2014 2013 2012
Total Market Index 534.2 425.5 456.1 52.4 361.5 616.6 813.8
 Purchase 257.4 202.1 214.2 48.9 172.1 197.5 187.8
 Refinancing 2,106.2 1,695.9 1,833.0 55.1 1,449.8 3,070.0 4,505.0
15-Year Mortgage Effective Interest Rate (%) 3.33 3.40 3.41 3.44
3.54 3.42 3.25
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