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Economy in Brief

U.S. Mortgage Loan Applications Decline Again
by Tom Moeller  August 3, 2016

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index fell 3.5% (+32.6% y/y) last week following an 11.2% decline. Purchase applications were off 2.4% (+6.0% y/y), down sharply for the third straight week. Refinancing applications fell 4.2%, but rose 55.5% y/y.

The effective interest rate on a 15-year mortgage remained unchanged at 3.02%, and 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 was steady at 3.76%, down from 4.28% near year-end. The rate on a Jumbo 30-year loan eased to 3.72%. For adjustable 5-year mortgages, the effective interest rate fell to 2.99% from 3.07%.

The average mortgage loan size was little changed at $278,400 (+5.6% y/y). For purchases, it also was steady at $298,500 (+2.9% y/y); for refinancings, it remained lower at $265,400 (+11.2% y/y).

Applications for fixed interest rate loans increased 35.6% y/y, while adjustable-rate loan applications declined 8.5% 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) 07/29/16 07/22/16 07/15/16 Y/Y 2015 2014 2013
Total Market Index -3.5 -11.2 -1.3 32.6 17.9 -41.4 -24.2
 Purchase -2.4 -3.3 -2.0 6.0 15.5 -12.9 5.2
 Refinancing -4.2 -15.1 -0.9 55.5 19.7 -52.8 -31.9
15-Year Mortgage Effective Interest Rate (%) 3.02 3.02 2.98 3.49 3.37 3.54 3.42
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