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Economy in Brief

U.S. Mortgage Loan Applications and Interest Rates Rise
by Tom Moeller  March 8, 2018

The Mortgage Bankers Association reported that its total Mortgage Applications Volume Index gained 0.3% last week (-5.3% y/y) following a 2.7% increase during the prior week. Purchase loan applications slipped 0.5% (+1.4% y/y) following a 6.2% jump. Applications to refinance increased 1.5% (-12.7% y/y) following a 1.2% drop.

The effective interest rate on a 15-year mortgage increased to 4.27%, up sharply from the 3.46% low in September. The effective rate on a 30-year fixed-rate loan held steady w/w at 4.82%. The rate on a Jumbo 30-year loan was little-changed at 4.71%. For adjustable 5-year mortgages, the effective interest rate fell w/w to 3.98%, and was steady m/m.

The average mortgage loan size increased to $296,300, up 5.1% y/y. For purchases, the average loan size rose to $320,100 (2.2% y/y); for refinancings, it increased to $263,000 (7.8% y/y).

Applications for adjustable-rate loans declined 9.3% y/y, while applications for fixed-rate loans fell 5.0% 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) 03/02/18 02/23/18 02/16/18 Y/Y 2017 2016 2015
Total Market Index 0.3 2.7 -6.6 -5.3 -17.8 15.6 17.9
 Purchase -0.5 6.2 -6.2 1.4 5.6 13.3 15.5
 Refinancing 1.5 -1.2 -7.1 -12.7 -34.0 17.3 19.7
15-Year Mortgage Effective Interest Rate (%) 4.27 4.21 4.18 3.71 (Mar'17) 3.59 3.22 3.37
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