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Economy in Brief

Mortgage Applications Retraced Prior Week's Jump
by Tom Moeller June 22, 2005

The Mortgage Bankers Association reported that last week, total mortgage applications retraced more than half of the prior week's surge and fell 11.3% w/w. Nevertheless, applications so far in June remain 11.0% ahead of the May average which rose 6.5% versus April.

Purchase applications retraced all of the prior week's surge and fell 9.4% w/w. In June, applications are 2.2% ahead of May which rose 3.1% from 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.

Applications to refinance reversed about one third of the prior week's 25.6% w/w jump. In June refis are 22.4% ahead of May.

The effective interest rate on a conventional 30-year mortgage was about unchanged w/w at 5.86% and remained down from the 5.92% averaged during May. The effective rate on a 15-year mortgage rose to 5.54%.

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.

The latest National Delinquency Survey from the the Mortgage Bankers Association can be viewed here.

Is the Bond Market Irrational? from the Federal Reserve Bank of St. Louis is available here.

Social Security, Saving, and Wealth Accumulation also from the Federal Reserve Bank of St. Louis can be found here.

MBA Mortgage Applications (3/16/90=100) 06/17/05 06/10/05 Y/Y 2004 2003 2002
Total Market Index 786.8 887.0 30.9% 735.1 1,067.9 799.7
  Purchase 479.4 529.3 5.5% 454.5 395.1 354.7
  Refinancing 2,575.0 2,967.4 77.0% 2,366.8 4,981.8 3,388.0
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