Global| Apr 10 2013U.S. Mortgage Applications Recover As Interest Rates Decline
by:Tom Moeller
|in:Economy in Brief
Summary
The index of total mortgage applications from the Mortgage Banker Association increased 4.5% (21.7% y/y) last week and reversed the prior week's falloff. The rise was led by a 6.3% gain (28.5% y/y) in applications to refinance an [...]
The index of total mortgage applications from the Mortgage Banker Association increased 4.5% (21.7% y/y) last week and reversed the prior week's falloff. The rise was led by a 6.3% gain (28.5% y/y) in applications to refinance an existing loan. Home purchase mortgage applications reversed the prior week's increase with a 1.3% decline (+3.1% y/y).
The effective rate on fixed-interest, conventional 15-year mortgages fell w/w to 3.00%, nearing December's weekly low of 2.89%. The effective rate on a 30-year fixed rate loan declined to 3.81% last week while the rate on a Jumbo 30-year loan slipped to 3.89%. Though it's recently narrowed, the spread between 15- and 30-year loan rates continued wide by historical standards. The effective interest rate on an adjustable 5-year mortgage was stable at 2.71%.
Applications for fixed interest rate loans rose by 23.0% y/y while adjustable rate loan applications fell 1.0% y/y. The average mortgage loan size was $221,300. The average size loan for home purchases was $262,500 last week while for refinancings it was $207,500.
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.
The minutes to the latest FOMC meeting can be found here.
| MBA Mortgage Applications (SA, 3/16/90=100) | 04/05/13 | 03/29/13 | 03/22/13 | Y/Y% | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 826.1 | 790.7 | 823.7 | 21.7 | 813.8 | 572.3 | 659.3 |
| Purchase | 209.7 | 212.4 | 209.5 | 3.1 | 187.8 | 182.6 | 199.8 |
| Refinancing | 4,453.9 | 4,189.0 | 4,436.6 | 28.5 | 4,505.0 | 2,858.4 | 3,348.1 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.00 | 3.08 | 3.13 | 3.43 (4/12) |
3.25 | 3.97 | 4.39 |
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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