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Economy in Brief

U.S. Mortgage Loan Applications Increase As Rates Remain Low
by Tom Moeller  January 27, 2016

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index gained 8.8% last week (-15.1% y/y), the third month of strong gain. Purchase applications increased 4.6% (22.5% y/y). Refinancing applications rose 11.3% (-30.1% y/y), the third month of strong gain.

The effective interest rate on a 15-year mortgage eased to 3.38%, down from its recent high of 3.50%. The effective rate on a 30-year fixed rate loan fell w/w to 4.13% and the rate on a Jumbo 30-year loan declined to 3.96%. For adjustable 5-year mortgages, the effective interest rate fell to 3.22%.

The average mortgage loan size rose sharply to $303,300 (11.3% y/y. For purchases, it rose to $299,000 (5.2% y/y). For refinancings it surged to $306,300 (14.5% y/y).

Applications for fixed interest rate loans decreased 14.2% y/y, while adjustable rate loan applications improved 4.3% 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) 01/22/16 01/15/16 01/08/16 Y/Y % 2015 2014 2013
Total Market Index 472.8 434.5 398.5 -15.1 426.1 361.5 616.6
 Purchase 237.8 227.3 231.1 22.5 198.7 172.1 197.5
 Refinancing 1,822.5 1,638.1 1,380.4 -30.1 1,735.2 1,449.8 3,070.0
15-Year Mortgage Effective Interest Rate (%) 3.38 3.39 3.52 3.23 3.37 3.54 3.42
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