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Economy in Brief

Rise in Mortgage Applications Due To Refinancing
by Tom Moeller July 20, 2005

Total mortgage applications inched up 1.2% last week but remained down nearly 10% from the weekly high in early June, according to the Mortgage Bankers Association. For July so far, applications remained 1.7% ahead of the June average which rose 9.9% versus May.

Applications to refinance rose 2.5% and have been moving irregularly sideways since early last month. So far in July applications to refinance are 1.7% ahead of June when they rose 21.2% versus May.

Purchase applications slipped 0.1% w/w and marked the fourth decline in the last five weeks. So far in July purchase applications are 1.6% above June due to the large 9.1% jump during the first week of the month. During the last ten years there has been a 49% 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 rose to 5.94%, the highest level since mid-May. The effective rate on a 15-year mortgage also rose to 5.60%.

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.

Today's Testimony of Fed Chairman Alan Greenspan, the semiannual Monetary Policy Report to the Congress, is available here.

MBA Mortgage Applications (3/16/90=100) 07/15/05 07/08/05 Y/Y 2004 2003 2002
Total Market Index 801.1 791.9 29.6% 735.1 1,067.9 799.7
  Purchase 488.7 489.0 11.0% 454.5 395.1 354.7
  Refinancing 2,618.2 2,554.3 58.6% 2,366.8 4,981.8 3,388.0
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