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Economy in Brief

U.S. Mortgage Loan Applications Decline as Interest Rates Rise
by Tom Moeller  September 20, 2017

The Mortgage Bankers Association reported that its total Mortgage Applications Volume Index backpedaled 9.7% (-21.3% y/y) in the week ended September 15 and reversed the prior week's gain. Purchase applications fell 10.8% (+1.6% y/y) following a 10.9% rise. Applications to refinance were off 8.5% and remained down by roughly one-third y/y.

The effective interest rate on a 15-year mortgage rose to 3.46% from 3.40%. The effective rate on a 30-year fixed-rate loan was little-changed at 4.16%. The rate on a Jumbo 30-year loan eased slightly to 4.05%. For adjustable 5-year mortgages, the effective interest rate rose to 3.42%.

The average mortgage loan size slipped to $297,800, up 7.1% y/y. For purchases, the average loan size rose to $313,900 (3.4% y/y); for refinancings, it declined to $282,900 (+7.4% y/y).

Applications for adjustable rate loans rose 22.5% y/y, while applications for fixed rate loans fell 23.3% y/y.

The survey covers over 75% 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) 09/15/ 17 09/08/17 09/01/17 Y/Y 2016 2015 2014
Total Market Index -9.7 9.9 3.3 -21.3 15.6 17.9 -41.4
 Purchase -10.8 10.9 1.4 1.6 13.3 15.5 -12.9
 Refinancing -8.5 8.9 5.1 -35.1 17.3 19.7 -52.8
15-Year Mortgage Effective Interest Rate (%) 3.46 3.40 3.44 3.04 (Sep. '16) 3.22 3.37 3.54
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