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Economy in Brief

Mortgage Applications Up
by Tom Moeller September 21, 2005

The total number of mortgage applications last week recouped all of the prior period's decline with a 1.5% increase, according to the Mortgage Bankers Association. Combined with a sharp gain earlier in the month, the rise lifted applications so far in September 2.9% above August.

Mortgage applications to refinance surged 7.0% w/w. The gain raised the September average 2.8% above August which fell 10.6% from July.

Purchase applications fell 2.6%, the first decline in three weeks. The average level in September so far is 3.1% above August. 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 6.05% after three weeks slightly below 6.0%. The effective rate on a 15-year mortgage also fell to 5.69%, the highest level in a month. The interest rate on 15 and 30 year mortgages are closely correlated (>90%) with the rate on 10 year Treasury securities.

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.

Housing Markets and Demographics from the Federal Reserve Bank of San Francisco can be found here.

MBA Mortgage Applications (3/16/90=100) 09/16/05 09/09/05 Y/Y 2004 2003 2002
Total Market Index 772.2 760.6 11.8% 735.1 1,067.9 799.7
  Purchase 500.3 513.4 9.6% 454.5 395.1 354.7
  Refinancing 2,353.7 2,198.7 14.7% 2,366.8 4,981.8 3,388.0
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