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Economy in Brief

U.S. Mortgage Loan Applications Dip; Rates Remain Lower
by Tom Moeller  March 2, 2016

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index fell 4.8% last week (+18.1% y/y), about as it did during the prior week. Nevertheless, applications rose nearly one-quarter last month versus January. Purchase applications eased 0.6% w/w (+26.9% y/y), and fell 2.4% m/m. Refinancing applications declined 7.2% (+12.5% y/y), but surged 43.7% m/m.

The effective interest rate on a 15-year mortgage of 3.2% was little-changed last month, but down from the 3.5% highs of November and December. The effective rate on a 30-year fixed-rate loan held w/w at 3.9%, but was down from 4.3% near year-end. The rate on a Jumbo 30-year loan also stayed at 3.84%, down from the 4.1% high. For adjustable 5-year mortgages, the effective interest rate held w/w at 3.14%, but remained below the 3.3% averaged in November and December.

The average mortgage loan size eased to $288,000 (+9.3% y/y). For purchases, it rose to $300,400 (2.7% y/y), but for refinancings it fell to $279,200 (+13.8% y/y).

Applications for fixed interest rate loans increased 17.8% y/y while adjustable-rate loan applications improved 21.2% 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) 02/26/16 02/19/16 02/12/16 Y/Y % 2015 2014 2013
Total Market Index 496.5 521.5 544.9 18.1 417.8 355.3 607.6
 Purchase 216.7 217.9 213.3 26.9 195.0 169.8 195.8
 Refinancing 2,104.5 2,267.4 2,456.7 12.5 1,735.2 1,449.8 3,070.0
15-Year Mortgage Effective Interest Rate (%) 3.21 3.22 3.18 3.31 3.37 3.54 3.42
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