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Economy in Brief

U.S. Mortgage Market Activity Eases W/W
by Tom Moeller  August 8, 2012

The Mortgage Bankers Association index of total mortgage applications fell 1.8% last week (35.0% y/y). Nevertheless, this month remained up sharply from July. The figures remain close to the high in this cycle. Applications to refinance fell 1.9% w/w but remain roughly double last year's level. Conversely, home purchase applications fell 1.4% last week (-2.6% y/y) and have fallen 5.8% since the May peak. Applications for fixed interest rate loans fell 1.6% w/w but were up one-third y/y. Variable rate loans fell 5.0% w/w and were off 13.4% y/y.

The effective rate on fixed-interest, conventional 15-year mortgages slipped w/w to 3.19%, the lowest since the early-1950s and down from the 4.50% high in February of last year. The effective rate on a 30-year fixed rate loan was 3.89%. On a 30-year Jumbo loan, the effective rate rose w/w to 4.14%. 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 slipped back to 2.86% and was 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) 08/03/12 07/27/12 07/20/12 Y/Y% 2011 2010 2009
Total Market Index 928.8 945.7 943.6 35.0 572.3 659.3 736.4
 Purchase 179.5 182.0 186.2 -2.6 182.6 199.8 263.5
 Refinancing 5,349.6 5,452.8 5,411.6 47.5 2,858.4 3,348.1 3,509.2
15-Year Mortgage Effective Interest Rate (%) 3.19 3.22 3.19 3.76
3.97 4.39 4.85
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