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Economy in Brief

Mortgage Applications Falter
by Tom Moeller November 10, 2004

Mortgage applications fell 4.5% last week and reversed about half of the 8.2% gain the week earlier, according to the Mortgage Bankers Association (MBA).

Purchase applications fell 2.7% after the prior week's 12.6% surge. During the last ten years there has been a 60% correlation between the y/y change in purchase applications and the change in new plus existing home sales.

Applications to refinance fell 6.7% to the lowest level since early last month.

The effective interest rate on a conventional 30-year mortgage rose to 5.96% from 5.90% the prior week and from averaged 5.92% in October. The effective rate on a 15-year mortgage rose to 5.41%.

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) 11/05/04 10/29/04 Y/Y 2003 2002 2001
Total Market Index 727.3 761.7 16.2% 1,067.9 799.7 625.6
  Purchase 483.0 496.5 28.7% 395.1 354.7 304.9
  Refinancing 2,148.7 2,303.9 3.1% 4,981.8 3,388.0 2,491.0
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