Global| Jan 05 2005Total Mortgage Applications Down Sharply
by:Tom Moeller
|in:Economy in Brief
Summary
Mortgage applications virtually dried up during the latest week according to the Mortgage Bankers Association (MBA) Survey. A 10.6% decline during the last week of 2004 capped off several weeks of decline, dropped total applications [...]
Mortgage applications virtually dried up during the latest week according to the Mortgage Bankers Association (MBA) Survey. A 10.6% decline during the last week of 2004 capped off several weeks of decline, dropped total applications to the lowest level since June and pulled the average level of activity during the year down nearly one third versus 2003.
Applications to purchase weakened notably and fell 13.7% to the lowest level since February. Nevertheless, the average level of purchase applications rose 15.0% last year versus 2003. During the last ten years there has been a 59% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
Refi's fell a lesser 5.7% w/w but that followed a 7.9% decline the prior week and put an end to a year which saw applications to refinance halve versus 2003.
The effective interest rate on a conventional 30-year mortgage fell slightly to 5.94% versus an average 6.05% during 2004. The effective rate on a 15-year mortgage was 5.43% last week versus the 2004 average of 5.47%.
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.
The minutes of the latest Federal Open Market Committee meeting can be found here.
"What Determines the Credit Spread?" from the Federal Reserve Bank of San Francisco is available here.
| MBA Mortgage Applications (3/16/90=100) | 01/01/05 | 12/25/04 | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Total Market Index | 605.7 | 677.4 | 1.0% | 735.1 | 1,067.9 | 799.7 |
| Purchase | 417.3 | 483.8 | 4.0% | 454.5 | 395.1 | 354.7 |
| Refinancing | 1,701.3 | 1,803.9 | -3.1% | 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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