Global| Apr 18 2012U.S. Mortgage Applications For Refinancing Surge
by:Tom Moeller
|in:Economy in Brief
Summary
Lower interest rates finally prompted a gain in mortgage applications. The Mortgage Bankers Association for total mortgage applications rose 6.9% w/w to 725.4 (55.2% y/y). The increase raised applications to the highest level in five [...]
Lower interest rates finally prompted a gain in mortgage applications. The Mortgage Bankers Association for total mortgage applications rose 6.9% w/w to 725.4 (55.2% y/y). The increase raised applications to the highest level in five weeks. Applications to refinance led the surge with a 13.5% jump last week and they've doubled during the last year. Fewer home purchase applications offset this gain with an 11.2% w/w decline (-14.4% y/y). Nevertheless, so far this month they've risen 12.0% from the February average. Fixed interest rate loan applications remained down sharply from the January peak and variable rate loan applications have moved sideways.
The effective rate on fixed-interest, conventional 15-year mortgages returned to its recent low of 3.43%, fully reversing the increase through the end of last month. The effective rate on a 30-year fixed rate loan also returned to its low of 4.18%. On a 30-year Jumbo the effective rate was a lower 4.47%. Though it's narrowed slightly of late, the spread between 15- and 30-year loan rates continued wide by historical standards. The effective interest rate on an adjustable 5-year mortgage neared its low with a decline to 2.96%.
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 covers roughly 50% of all U.S. residential mortgage applications processed each week by mortgage banks, commercial banks and thrifts. The figures for weekly mortgage applications are available in Haver's SURVEYW database.
Increased Real House Price Volatility Signals Break from Great Moderation from the Federal Reserve Bank of Dallas is available here.
| MBA Mortgage Applications (SA, 3/16/90=100) | 04/13/12 | 04/06/12 | 03/30/12 | Y/Y % | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 725.4 | 678.8 | 695.7 | 55.2 | 572.3 | 659.3 | 736.4 |
| Purchase | 180.5 | 203.3 | 204.4 | 6.1 | 182.6 | 199.8 | 263.5 |
| Refinancing | 3,936.3 | 3,467.3 | 3,576.8 | 99.3 | 2,858.4 | 3,348.1 | 3,509.2 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.43 | 3.46 | 3.50 | 4.33 (4/11) |
3.97 | 4.39 | 4.85 |
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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