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Economy in Brief

Mortgage Applications Up Modestly
by Tom Moeller January 7, 2004

The index of mortgage applications compiled by the Mortgage Bankers Association last week recovered half of the prior week's 9.0% drop (-49.3% y/y).

Purchase applications rose 2.9% w/w (+6.7% y/y) following two weeks of sharp decline. Purchase applications started 2004 2.1% below the December average which fell 3.8% versus November.

During the last ten years there has been a 54% correlation between the y/y change in purchase applications and the change in new plus existing home sales.

Applications to refinance rose 6.8% w/w and gained back half of the prior week's decline (-70.1% y/y). Refis started 2004 5.1% below the December average which fell 16.3% versus November.

The effective interest rate on a conventional 30-Year mortgage rose to 6.10% versus 5.97% averaged last year. The effective rate on a 15-year mortgage also rose to 5.48% from 5.38% averaged during 2003.

The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site here.

MBA Mortgage Applications (3/16/90=100) 1/02/04 12/26/03 2003 2002 2001
Total Market Index 599.9 574.1 1,067.9 799.7 625.6
  Purchase 401.3 390.1 395.1 354.7 304.9
  Refinancing 1,755.4 1,644.3 4,981.8 3,388.0 2,491.0
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