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Economy in Brief
U.S. Mortgage Applications Continued to Slide Amid Higher Rates
The biggest declines have been in refinancing activity, while applications for purchase are just starting to crack...
UK Inflation Jumps
Inflation is at the highest rate since the series began in January of 1989...
U.S. Industrial Production Much Stronger than Expected in April
The increase in manufacturing output in April was once again led by motor vehicle and parts production...
U.S. Retail Sales Posted Solid Rise in April
Notwithstanding falling real incomes and declining confidence measures, consumer spending posted a solid increase...
U.S. Home Builder Index Took a Steep Drop in May
This is the fifth straight month that builder sentiment has declined...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
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Peak Inflation & Fed Policy: A Relationship Which Should Worry The Fed And Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Tom Moeller April 11, 2012
Despite lower interest rates, mortgage applications have yet to move higher. Last week the index of total mortgage applications fell 2.4% w/w to 678.8 (+52.9% y/y), down for the eighth week in the last nine. Fewer applications to refinance have led the decline. Last week they were off 3.1% but they were still up 80.2% versus last year. This seventh decline in the last eight weeks amounts to a reduction of nearly one-quarter from two months ago. Home purchase applications slipped 0.5% w/w (6.1% y/y). They've risen by one-quarter from the low two months ago. Fixed interest rate loans remained down sharply from the January peak but variable rate loan applications have moved sideways.
The effective rate on fixed-interest, conventional 15-year mortgages fell w/w to 3.46% and reversed nearly all of the increase through the end of last month. The effective rate on a 30-year fixed rate loan also fell to 4.22%. On a 30-year Jumbo the effective rate was a lower 4.54%. 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 fell to 3.03%.
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) | 04/06/12 | 03/30/12 | 03/23/12 | Y/Y % | 2011 | 2010 | 2009 |
---|---|---|---|---|---|---|---|
Total Market Index | 678.8 | 695.7 | 663.7 | 52.9 | 572.3 | 659.3 | 736.4 |
Purchase | 203.3 | 204.4 | 190.6 | 6.1 | 182.6 | 199.8 | 263.5 |
Refinancing | 3,467.3 | 3,576.8 | 3,438.6 | 80.2 | 2,858.4 | 3,348.1 | 3,509.2 |
15-Year Mortgage Effective Interest Rate (%) | 3.46 | 3.50 | 3.60 | 4.33 (4/11) |
3.97 | 4.39 | 4.85 |