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Economy in Brief

U.S. Mortgage Loan Applications Rebound As Interest Rates Increase
by Tom Moeller  October 18, 2017

The Mortgage Bankers Association reported that its total Mortgage Applications Volume Index rebounded 3.6% (-18.2% y/y) last week, but so far this month was down 3.1% from September. Purchase applications increased 4.2% (8.9% y/y) following a 0.1% slip. Applications to refinance gained 3.0%, but remained down by roughly one-third y/y.

The effective interest rate on a 15-year mortgage rose to 3.56%, the highest level since July. The effective rate on a 30-year fixed-rate loan was little changed w/w at 4.27%. The rate on a Jumbo 30-year loan was stable w/w at 4.22%. For adjustable 5-year mortgages, the effective interest rate eased to 3.45%, but remained up from last month's low of 3.25%.

The average mortgage loan size declined to $283,000, up 2.1% y/y. For purchases, the average loan size fell to $309,900 (+0.6% y/y); for refinancings, it declined to $254,600 (-1.3% y/y).

Applications for adjustable rate loans rose 22.8% y/y, while applications for fixed rate loans fell 19.9% 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) 10/13/17 10/06/17 09/29/17 Y/Y 2016 2015 2014
Total Market Index 3.6 -2.1 -0.4 -18.2 15.6 17.9 -41.4
 Purchase 4.2 -0.1 1.0 8.9 13.3 15.5 -12.9
 Refinancing 3.0 -4.2 -1.8 -35.6 17.3 19.7 -52.8
15-Year Mortgage Effective Interest Rate (%) 3.56 3.53 3.51 3.09 (Oct. '16) 3.22 3.37 3.54
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