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Economy in Brief

U.S. Mortgage Applications Recover With More Refinancing
by Tom Moeller  May 16, 2012

The Mortgage Bankers Association index of total mortgage applications rose 9.2% (43.1% y/y) during last week. The increase was paced by a 13.0% gain (64.3% y/y) in refinancing. Home purchase applications fell 2.4% w/w (2.0% y/y). Applications for both fixed and variable interest rate loans increased moderately.

The effective rate on fixed-interest, conventional 15-year mortgages slipped to a new low of 3.36% and was down from the 4.50% high in February of last year. The effective rate on a 30-year fixed rate loan fell w/w to 4.06%. On a 30-year Jumbo loan the effective rate fell to 4.31%. 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 also slipped to 2.94% and remained down from its 3.93% high during February of last year.

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) 05/11/12 05/04/12 04/27/12 Y/Y % 2011 2010 2009
Total Market Index 775.6 710.4 698.2 45.0 572.3 659.3 736.4
 Purchase 192.4 197.1 190.7 2.0 182.6 199.8 263.5
 Refinancing 4,219.1 3,734.8 3,687.7 64.3 2,858.4 3,348.1 3,509.2
15-Year Mortgage Effective Interest Rate (%) 3.36 3.37 3.41 4.06
3.97 4.39 4.85
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