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Economy in Brief

Mortgage Applications Slipped
by Tom Moeller September 15, 2004

The index of mortgage applications compiled by the Mortgage Bankers Association slipped 2.0% last week following a strong 7.7% gain the week prior. So far in September mortgage applications are 5.6% ahead of August.

Purchase applications fell 4.3% last week, undoing most of the 7.4% rise the prior week. Nevertheless, purchase applications in September are 3.9% higher than in August. During the last ten years there has been a 59% correlation between the y/y change in purchase applications and the change in new plus existing home sales.

Applications to refinance mortgages rose 1.2% following an 8.0% surge the prior week. Refi's in September are 8.1% ahead of August.

The effective interest rate on a conventional 30-year mortgage fell to 5.95% from 6.06% the prior week. In May, 30-year financing averaged 6.53%. The effective rate on a 15-year mortgage fell to 5.38%, down from the 5.97% averaged in May.

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) 09/10/04 09/03/04 Y/Y 2003 2002 2001
Total Market Index 678.2 692.0 -6.7% 1,067.9 799.7 625.6
  Purchase 455.7 476.0 5.4% 395.1 354.7 304.9
  Refinancing 1,972.5 1,948.9 -19.1% 4,981.8 3,388.0 2,491.0
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