Recent Updates

  • Australia: Overseas Arrivals and Departures (Oct)
  • Japan: TANKAN: Employment Conditions, Supply and Demand, By Industry Detail (Q4)
  • China: Insurance Industry (Nov)
  • New Zealand: Performance of Service Index, Composite PMI (Nov), Electricity Generation and Consumption (Q3)
  • Iran: Monetary & Credit Aggregates (Oct)
  • Israel: Job Vacancy Survey (Nov)
  • more updates...

Economy in Brief

Mortgage Applications Surged
by Tom Moeller October 4, 2006

According to the Mortgage Bankers Association. the total number of mortgage applications surged 11.9% last week. It was the strongest w/w increase since June 2005. The gain lifted applications for the month 5.6% above the August average.

Applications to refinance surged 17.5% after the prior week's 4.1% decline. The average level of refis in September rose 8.7% from August which surged 13.3% m/m from July.

Purchase applications recovered 7.6% after the prior week's 5.5% decline. The increase raised the month's average 3.2% from August, only the first rise in the last five months. The latest level was 23.1% below the peak during May of 2005.

During the last ten years there has been a 58% 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 six basis points to 6.39% to 6.45% and averaged 6.50% last month versus 6.64% in August. The peak for 30 year financing was 7.08% late in June. The rate on 15-year financing ticked just slightly w/w to 6.11% and averaged 6.20% last month. The peak rate was 6.75%. Interest rates on 15 and 30 year mortgages are closely correlated (>90%) with the rate on 10 year Treasury securities.

During the last ten years there has been a (negative) 79% correlation between the level of applications for purchase and the effective interest rate on a 30-year mortgage.

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) 09/29/06 09/22/06 Y/Y 2005 2004 2003
Total Market Index 633.9 566.5 -11.2% 708.6 735.1 1,067.9
  Purchase 404.6 375.9 -14.6% 470.9 454.5 395.1
  Refinancing 1,970.8 1,677.5 -6.5% 2,092.3 2,366.8 4,981.8
close
large image