Global| Oct 05 2005Mortgage Applications Fell With Fewer New Purchases
by:Tom Moeller
|in:Economy in Brief
Summary
The total number of mortgage applications fell 1.1% last week following the sharp 6.6% drop the prior week, according to the Mortgage Bankers Association. In September, applications did rise 0.2% from August but the average level was [...]
The total number of mortgage applications fell 1.1% last week following the sharp 6.6% drop the prior week, according to the Mortgage Bankers Association. In September, applications did rise 0.2% from August but the average level was down 6.7% from a recent peak in June.
Purchase applications fell for the third consecutive week. A 1.9% decline reduced the gain in September to 1.0% versus August. 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.
Mortgage applications to refinance were roughly unchanged w/w after the 10.5% plunge the prior week. For September, refis fell 0.7% m/m following a 10.6% drop in August.
The effective interest rate on a conventional 30-year mortgage rose to 6.18% from 6.09% the week prior and the effective rate on a 15-year mortgage rose to 5.83%. The interest rate on 15 and 30 year mortgages are closely correlated (>90%) with the rate on 10 year Treasury securities.
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.
House Prices and Monetary Policy: A Cross-Country Study from the Board of Governors of the Federal Reserve System is available here.
Yesterday's speeches from several Federal Reserve Board officials contained comments on the economic outlook, the business cycle and Fed Policy. Dallas Fed President Fisher's comments can be found here, St. Louis Fed President Poole's speech is here and Philadelphia Fed President Santomero's comments are available here.
| MBA Mortgage Applications (3/16/90=100) | 09/30/05 | 09/23/05 | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Total Market Index | 713.5 | 721.2 | -1.6% | 735.1 | 1,067.9 | 799.7 |
| Purchase | 473.8 | 483.1 | 3.2% | 454.5 | 395.1 | 354.7 |
| Refinancing | 2,107.4 | 2,106.6 | -7.2% | 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.
