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Economy in Brief

Mortgage Applications Near Lowest of the Year
by Tom Moeller April 6, 2005

The Mortgage Bankers Association reported that mortgage applications dropped 4.4% last week to the second lowest level of 2005. The decline lowered the opening level for April 6.8% below March which fell 4.8% from February.

Purchase applications dropped 5.3% and reversed all of the prior week's rise to open the month 2.6% below March. During the last ten years there has been a 50% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.

Applications to refinance fell for the fifth week in the last six. The 3.1% decline lowered the latest level 12.2% below the March average which fell 16.1% versus February.

The effective interest rate on a conventional 30-year mortgage slipped to 6.16% following the prior week's jump to 6.34%. The effective rate on a 15-year mortgage reversed all of the prior week's rise and fell back to 5.81%.

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.

What Financing Data Reveal about Dealer Leverage from the Federal Reserve Bank of New York can be found here.

MBA Mortgage Applications (3/16/90=100) 04/01/05 03/25/05 Y/Y 2004 2003 2002
Total Market Index 644.5 674.3 -36.4% 735.1 1,067.9 799.7
  Purchase 446.0 470.9 -6.6% 454.5 395.1 354.7
  Refinancing 1,798.8 1,857.2 -56.4% 2,366.8 4,981.8 3,388.0
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