Global| Aug 10 2005Mortgage Applications Down With Less Refinancing
by:Tom Moeller
|in:Economy in Brief
Summary
Total mortgage applications fell last week for the sixth decline in the last eight weeks according to the Mortgage Bankers Association. The 0.9% w/w decline lowered the starting level in August 5.8% below July which fell 1.4% from [...]
Total mortgage applications fell last week for the sixth decline in the last eight weeks according to the Mortgage Bankers Association. The 0.9% w/w decline lowered the starting level in August 5.8% below July which fell 1.4% from June.
Mortgage applications to refinance continued to decline as interest rates moved higher. The 3.3% w/w decline was the sixth in the last eight weeks and it lowered refi's 26.7% from the peak in early June.
During that period, the effective interest rate on a conventional 30-year mortgage rose to 6.16% from 5.87%. The effective rate on a 15-year mortgage also rose to 5.81%.
Purchase applications nevertheless continued to strengthen. Last week a 0.9% w/w gain lifted the starting level in August 0.6% above the July average which rose 0.9% versus June. During the last ten years there has been a 49% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
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 accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site here.
Monetary Policy and Asset Price Bubbles from the Federal Reserve Bank of San Francisco is available here.
| MBA Mortgage Applications (3/16/90=100) | 08/05/05 | 07/29/05 | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Total Market Index | 745.0 | 752.1 | 20.9% | 735.1 | 1,067.9 | 799.7 |
| Purchase | 498.8 | 494.5 | 13.4% | 454.5 | 395.1 | 354.7 |
| Refinancing | 2,176.5 | 2,250.3 | 32.7% | 2,366.8 | 4,981.8 | 3,388.0 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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