Global| Aug 18 2004Mortgage Applications Reach Highest in 3 Months
Summary
The index of mortgage applications compiled by the Mortgage Bankers Association jumped 11.9% last week, breaking out of its recent tight range. At 689.4 (Mar 16, 1990 = 100), the index reached its highest since the first week of May. [...]
The index of mortgage applications compiled by the Mortgage Bankers Association jumped 11.9% last week, breaking out of its recent tight range. At 689.4 (Mar 16, 1990 = 100), the index reached its highest since the first week of May.
Applications for mortgages for home purchase rose 6.2% after declining 2.7% the week before. These are 20.4% ahead of their year-ago volume.
Applications to refinance existing mortgages surged 20.9% in the latest week, following a modest 2.9% rise the prior week. These "refi's" are 28.1% below a year ago.
Mortgage applications, particularly for refinancing, are especially sensitive to interest rate movements. The widely followed FHLMC 30-year contract rate was 5.99% in the August 6 week and fell to 5.85% last week. In the industry, 6.00% stands as a kind of "flashpoint" for significant increases in refinancing activity. As seen in the graph, there is an 80% correlation of the refi index and this Freddie Mac mortgage rate.
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. In Haver's databases, these weekly data appear in "SURVEYW". There is a sizable collection of related information in USECON covering mortgage terms, debt service, and the role of securitization in the mortgage market.
| MBA Mortgage Applications (3/16/90=100) | 08/13/04 | 08/06/04 | 07/30/04 | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|
| Total Market Index | 689.4 | 616.1 | 620.4 | 1,067.9 | 799.7 | 625.6 |
| Purchase | 467.0 | 440.0 | 452.0 | 395.1 | 354.7 | 304.9 |
| Refinancing | 1,982.7 | 1,640.5 | 1,600.3 | 4,981.8 | 3,388.0 | 2,491.0 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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