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Economy in Brief

U.S. Mortgage Applications Rise With Low Interest Rates
by Tom Moeller   October 12, 2011

The index of total mortgage applications rose 1.3% last week to 744.2 (March 16, 1990 = 100). Applications have risen more-than 80% since their early-year low. The jump has come as lower interest rates spurred refinancing.

Applications to refinance have more-than doubled since April and rose 1.3% last week. Weekly applications to purchase a home increased 1.1% w/w. They're roughly 10% above the August low but still off almost two-thirds versus before the recession.

The effective rate on fixed-interest, conventional 15-year mortgages inched up to 3.65%, still near the record low. The effective rate on 30-year fixed rate loans also rose to 4.39%. On a 30-year Jumbo the effective rate was 4.74%. Though it's narrowed slightly of late, the spread between 15- and 30-year loan rates continued wide by historical standards. The effective interest rate on an adjustable 5-year mortgage was roughly stable w/w at 3.23% versus 3.00% four weeks ago.

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 covers roughly 50% of all U.S. residential mortgage applications processed each week by mortgage banks, commercial banks and thrifts. The figures for weekly mortgage applications are available in Haver's SURVEYW database.

MBA Mortgage Applications (SA, 3/16/90=100) 10/7/11 9/30/11 9/23/11 Y/Y % 2010 2009 2008
Total Market Index 744.2 734.9 767.9 -17.1 659.3 736.4 642.9
 Purchase 177.1 175.2 176.6 -2.6 199.8 263.5 345.4
 Refinancing 4,072.3 4,019.0 4,239.6 -19.5 3,348.1 3,509.2 2,394.1
15-Year Mortgage Effective Interest Rate (%) 3.65 3.60 3.58 3.94
4.39 4.85 5.88
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