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Economy in Brief

U.S. Mortgage Loan Applications Rebound as Refinancings Surge
by Tom Moeller  June 22, 2016

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index increased 2.9% last week (35.8% y/y) and recouped the prior week's 2.4% decline. Applications to refinance jumped 6.5% (58.7% y/y) to the highest level in four months, but purchase applications fell 2.4% (+11.6% y/y) to the lowest level in three weeks.

The effective interest rate on a 15-year mortgage was little changed at 3.13%. Rates remained down from the 3.50% highs of November and December. The effective rate on a 30-year fixed-rate loan was steady at 3.86%, but was down versus 4.28% near year-end. The rate on a Jumbo 30-year loan eased to 3.79%. For adjustable 5-year mortgages, the effective interest rate held at 2.99%.

The average mortgage loan size rose to $287,100 (9.4% y/y). For purchases, it held at $302,000 (4.0% y/y); for refinancings, it increased to $276,100 (18.3% y/y).

Applications for fixed interest rate loans increased 37.7% y/y, while adjustable-rate loan applications gained 10.2% 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.

Risky Business: Government Mortgage Insurance Programs from the Federal Reserve Bank of New York is available here.

MBA Mortgage Applications (%, SA) 06/17/16 06/10/16 06/03/16 Y/Y 2015 2014 2013
Total Market Index 2.9 -2.4 9.3 35.8 17.9 -41.4 -24.2
 Purchase -2.4 -4.9 11.7 11.6 15.5 -12.9 5.2
 Refinancing 6.5 -0.7 7.4 58.7 19.7 -52.8 -31.9
15-Year Mortgage Effective Interest Rate (%) 3.13 3.14 3.20 3.13 3.37 3.54 3.42
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