Global| Sep 21 2011U.S. Mortgage Applications Improve As Rates Reach New Low
by:Tom Moeller
|in:Economy in Brief
Summary
Lower interest rates certainly are generating strength in mortgage refinancing, but so far no similar increase in home sales. The total index of mortgage applications rose 0.6% last week to 702.7 (March 16, 1990 = 100). Overall, [...]
Lower interest rates certainly are generating strength in mortgage refinancing, but so far no similar increase in home sales. The total index of mortgage applications rose 0.6% last week to 702.7 (March 16, 1990 = 100). Overall, applications have risen by roughly two-thirds since their early year low. The jump has come as lower interest rates spurred refinancing.
Applications to refinance have doubled since April though they rose just moderately last week. Weekly applications to purchase a home fell w/w and remained near the lowest since 1997. (Data revisions extend back to January.)
The effective rate on fixed-interest, conventional 15-year mortgages dropped to a new record low of 3.57%. The effective rate on 30-year fixed rate loans also fell to a new low of 4.40%. However, the spread between 15- and 30-year loan rates continued wide by historical standards.
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.
| MBA Mortgage Applications (SA, 3/16/90=100) | 9/16/11 | 9/9/11 | 9/2/11 | Y/Y % | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 702.7 | 698.8 | 655.9 | -11.1 | 659.3 | 736.4 | 642.9 |
| Purchase | 172.2 | 180.7 | 177.5 | -3.0 | 199.8 | 263.5 | 345.4 |
| Refinancing | 3,813.2 | 3,732.4 | 3,522.6 | -12.5 | 3,348.1 | 3,509.2 | 2,394.1 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.57 | 3.61 | 3.62 | 4.15 (9/10) |
4.39 | 4.85 | 5.88 |
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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