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Economy in Brief

U.S. Mortgage Loan Applications Fall
by Tom Moeller  October 26, 2016

The Mortgage Bankers Association reported that its total Mortgage Market Volume Index declined 4.1% last week (+17.9% y/y) following a 0.6% gain. Applications to purchase fell 6.9% (+8.7% y/y) and were 12.0% below the June high. Refinancing applications declined 2.3% (+24.3% y/y), down 18.5% versus the July high.

The effective interest rate on a 15-year mortgage was steady at 3.08%, up slightly from the July low of 2.97%. Rates were down from the 3.50% highs of November and December. The effective rate on a 30-year fixed-rate loan eased to 3.81%, remaining down from 4.28% near year-end. The rate on a Jumbo 30-year loan held steady at 3.81%. For adjustable 5-year mortgages, the effective interest rate fell to 3.05%, still higher than 2.87% early in July.

The average mortgage loan size rose to $280,000, up 2.5% y/y. For purchases, it rose slightly to $309,100 (3.9% y/y); for refinancings, it increased to $262,600 (2.3% y/y).

Applications for fixed interest rate loans increased 20.8% y/y, while adjustable-rate loan applications declined 24.5% 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) 10/21/16 10/14/16 10/07/16 Y/Y 2015 2014 2013
Total Market Index -4.1 0.6 -6.0 17.9 17.9 -41.4 -24.2
 Purchase -6.9 3.0 -2.6 8.7 15.5 -12.9 5.2
 Refinancing -2.3 -0.8 -8.0 24.3 19.7 -52.8 -31.9
15-Year Mortgage Effective Interest Rate (%) 3.08 3.09 3.05 3.43 3.37 3.54 3.42
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