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Economy in Brief

Mortgage Applications Recover
by Tom Moeller May 25, 2005

Last week total mortgage applications recovered nearly half of the prior period's decline with a 4.3% gain that left applications so far in May 7.4% ahead of the April average, according to the Mortgage Bankers Association.

The gain was led by a 6.4% rise in applications to refinance which are 11.3% higher than in April.

Applications to purchase a home rose 2.8% following the prior week's 10.8% slump, yet in May are 4.7% ahead of April. 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.

The effective interest rate on a conventional 30-year mortgage fell to 5.88%, the lowest level since mid February. The effective rate on a 15-year mortgage fell to 5.53%.

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) 05/20/05 05/13/05 Y/Y 2004 2003 2002
Total Market Index 729.6 699.2 15.4% 735.1 1,067.9 799.7
  Purchase 482.3 469.3 7.2% 454.5 395.1 354.7
  Refinancing 2,167.9 2,036.7 27.9% 2,366.8 4,981.8 3,388.0
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