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Economy in Brief

U.S. Mortgage Loan Applications Decline
by Tom Moeller  July 27, 2016

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index fell 11.2% (+43.8% y/y) last week following a 1.3% shortfall. Purchase applications declined 3.3% (+12.2% y/y). Refinancing applications fell 15.1%, but more than doubled y/y.

The effective interest rate on a 15-year mortgage ticked higher to 3.02%, but remained near the lowest level since May 2013. Rates were down from the 3.50% highs of November and December. The effective rate on a 30-year fixed-rate loan gained slightly to 3.79%, still down from 4.28% near year-end. The rate on a Jumbo 30-year loan was roughly steady at 3.77%. For adjustable 5-year mortgages, the effective interest rate rose to 3.07% from 2.97%.

The average mortgage loan size declined to $277,200 (+8.1% y/y). For purchases, it was steady at $297,700 (+4.5% y/y); for refinancings, it declined to $264,200 (+15.4% y/y).

Applications for fixed interest rate loans increased 46.7% y/y, while adjustable-rate loan applications gained 2.1% 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.

MBA Mortgage Applications (%, SA) 07/22/16 07/15/16 07/08/16 Y/Y 2015 2014 2013
Total Market Index -11.2 -1.3 7.2 43.8 17.9 -41.4 -24.2
 Purchase -3.3 -2.0 0.0 12.2 15.5 -12.9 5.2
 Refinancing -15.1 -0.9 11.2 71.8 19.7 -52.8 -31.9
15-Year Mortgage Effective Interest Rate (%) 3.02 2.98 2.97 3.49 3.37 3.54 3.42
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