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Economy in Brief

U.S. Mortgage Applications Fall Sharply As Interest Rates Drift Up
by Tom Moeller   October 19, 2011

The index of total mortgage applications fell a sharp 14.9% fast week to 633.1 (March 16, 1990 = 100), the lowest level since early-last month. Nevertheless, applications have risen by more-than-one half since their early-year low.

Applications to refinance fell a sharp 16.6% last week and reversed the upward trend of late-last month. Weekly applications to purchase a home dropped 8.9% w/w, leaving them, for October, slightly below September.

The effective rate on fixed-interest, conventional 15-year mortgages inched up to 3.72% versus a September low of 3.57%. Nevertheless, rates remained near the record low. The effective rate on 30-year fixed rate loans also rose to 4.47%. On a 30-year Jumbo the effective rate was 4.77%. 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 moved higher to 3.26% versus 3.00% in early-September.

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) 10/14/11 10/7/11 9/30/11 Y/Y % 2010 2009 2008
Total Market Index 633.1 744.2 734.9 -21.2 659.3 736.4 642.9
 Purchase 161.4 177.1 175.2 -4.9 199.8 263.5 345.4
 Refinancing 3,396.1 4,072.3 4,019.0 -24.4 3,348.1 3,509.2 2,394.1
15-Year Mortgage Effective Interest Rate (%) 3.72 3.65 3.60 3.94
4.39 4.85 5.88
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