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Economy in Brief

U.S. Mortgage Loan Applications Rise With Refinancings
by Tom Moeller  July 13, 2016

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index increased 7.2% last week, up roughly two-thirds y/y, to the highest level since June 2013. The rise was driven by an 11.2% increase in refinancing applications, which more than doubled y/y. Purchase applications remained unchanged (19.5% y/y).

The effective interest rate on a 15-year mortgage fell to 2.97%, the lowest level since May 2013. Rates remained down from the 3.50% highs of November and December. The effective rate on a 30-year fixed-rate loan eased to 3.70%, down versus 4.28% near year-end. The rate on a Jumbo 30-year loan also fell to 3.70%. For adjustable 5-year mortgages, the effective interest rate eased to 2.87%.

The average mortgage loan size increased to $295,100 (12.3% y/y). For purchases, it was fairly steady at $298,900 (+3.5% y/y); for refinancings, it jumped to $293,000 (23.3% y/y).

Applications for fixed interest rate loans increased more than two-thirds y/y, while adjustable-rate loan applications gained 15.9% 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) 07/08/16 07/01/16 06/24/16 Y/Y 2015 2014 2013
Total Market Index 7.2 14.2 -2.6 65.5 17.9 -41.4 -24.2
 Purchase 0.0 4.3 -3.0 19.5 15.5 -12.9 5.2
 Refinancing 11.2 20.8 -2.4 106.1 19.7 -52.8 -31.9
15-Year Mortgage Effective Interest Rate (%) 2.97 3.04 3.12 3.49 3.37 3.54 3.42
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