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Economy in Brief

Mortgage Applications Fell Further
by Tom Moeller May 19, 2004

The index of mortgage applications compiled by the Mortgage Bankers Association tumbled 11.9% (-58.1% y/y) last week led by a 16.8% collapse in applications to refinance (-78.2% y/y).

Purchase applications posted the first w/w decline in a month and fell 8.1% (+14.8% y/y). Purchase applications so far this month are 3.6% ahead of the April average.

During the last ten years there has been a 56% correlation between the y/y change in purchase applications and the change in new plus existing home sales.

The effective interest rate on a conventional 30-Year mortgage fell slightly to 6.48% from 6.61% the week prior. The average for April was 6.16% versus 5.65% averaged in March. The effective rate on a 15-year mortgage similarly fell to 5.93% from 6.03% the week prior. The average for April was 5.54% versus 5.00% in March.

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) 05/14/04 05/07/04 2003 2002 2001
Total Market Index 654.1 742.2 1,067.9 799.7 625.6
  Purchase 454.2 494.3 395.1 354.7 304.9
  Refinancing 1,816.9 2,184.6 4,981.8 3,388.0 2,491.0
Gasoline Prices Set Another Record At $2.02
by Tom Moeller May 19, 2004

The US average retail gasoline price for all formulations jumped above $2.00/gallon for the first time ever last week. At $2.02 per gallon the price was up more than twenty cents from an average of $1.80 in April.

Crude oil prices similarly have surged with the price of West Texas Intermediate crude at $40.53 (+38.4% y/y) yesterday versus an average $36.69 last month.

Wholesale natural gas prices also have moved up and last week averaged $6.28/mmbtu (+4.1% y/y).

"Monetary Policy Actions, Macroeconomic Data Releases, and Inflation Expectations" from the Federal Reserve Bank of St. Louis is available here.

US Retail Gasoline Prices 05/17/04 12/29/03 Y/Y 2003 2002 2001
All Formulations ($/Gal.) $2.02 $1.48 34.6% $1.56 $1.34 $1.42
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