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Economy in Brief

U.S. Mortgage Loan Applications Ease
by Tom Moeller  September 28, 2016

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index fell 0.7% last week (+23.9% y/y) to the lowest level since late June. Refinancing applications were off 1.6% (+34.0% y/y) and added to the prior week's 7.6% decline. Purchase applications rose 0.8% (10.2% y/y) following a 6.8% drop.

The effective interest rate on a 15-year mortgage eased to 3.05%, but has risen slightly from last month's 2.98% low. Rates were down from the 3.50% highs of November and December. The effective rate on a 30-year fixed-rate loan fell to 3.76%, and reversed the prior week's increase. It remained down from 4.28% near year-end. The rate on a Jumbo 30-year loan eased to 3.72%. For adjustable 5-year mortgages, the effective interest rate was little-changed w/w at 3.07%, but was higher than 2.87% early in July.

The average mortgage loan size improved to $280,100, up 3.4%. For purchases it rose to $308,600 (4.9% y/y); for refinancings, it was little-changed at $263,100 (+3.5% y/y).

Applications for fixed interest rate loans increased 27.2% y/y, while adjustable-rate loan applications declined 21.1% 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.

Why Study Economics? is the title of yesterday's speech by Fed Vice Chairman Stanley Fischer, and it can be found here.

MBA Mortgage Applications (%, SA) 09/23/16 09/16/16 09/09/16 Y/Y 2015 2014 2013
Total Market Index -0.7 -7.3 4.2 23.9 17.9 -41.4 -24.2
 Purchase 0.8 -6.8 8.6 10.2 15.5 -12.9 5.2
 Refinancing -1.6 -7.6 1.7 34.0 19.7 -52.8 -31.9
15-Year Mortgage Effective Interest Rate (%) 3.05 3.07 3.05 3.43 3.37 3.54 3.42
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