Global| Sep 13 2006Mortgage Applications For Home Purchase Up
by:Tom Moeller
|in:Economy in Brief
Summary
For the second consecutive week, a firm rise in the number of mortgage applications for purchase led overall mortgage apps higher, according to the Mortgage Bankers Association. Purchase applications added 5.3% to the prior week's [...]
For the second consecutive week, a firm rise in the number of mortgage applications for purchase led overall mortgage apps higher, according to the Mortgage Bankers Association. Purchase applications added 5.3% to the prior week's 3.7% rise and lifted applications in September 4.4% above the August average which fell 3.5% from July.
During the last ten years there has been a 58% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
Overall mortgage applications rose 3.2% last week after the prior period's 1.8% increase.
Applications to refinance ticked up 0.1% following the prior week's 0.9% decline. The average level of refis in September is up 1.0% from August which surged 13.3% m/m from July.
The effective interest rate on a conventional 30-year mortgage was stable w/w at 6.53%. The peak for 30 year financing was 7.08% late in June. The rate on 15-year financing also was stable w/w at 6.25% and the peak rate was 6.75%. Interest rates on 15 and 30 year mortgages are closely correlated (>90%) with the rate on 10 year Treasury securities.
During the last ten years there has been a (negative) 79% correlation between the level of applications for purchase and the effective interest rate on a 30-year mortgage.
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.
Can Housing Be Green and Affordable? from the Federal Reserve Bank of Atlanta can be found here.
| MBA Mortgage Applications (3/16/90=100) | 09/08/06 | 09/01/06 | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Total Market Index | 584.2 | 566.3 | -23.2% | 708.6 | 735.1 | 1,067.9 |
| Purchase | 410.2 | 389.7 | -20.1% | 470.9 | 454.5 | 395.1 |
| Refinancing | 1,597.0 | 1,594.7 | -27.4% | 2,092.3 | 2,366.8 | 4,981.8 |
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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