Global| Jun 29 2011U.S. Mortgage Applications Rise In June As Interest Rates Fall
by:Tom Moeller
|in:Economy in Brief
Summary
Overall mortgage applications fell 2.7% last week following the prior week's 5.9% shortfall. Nevertheless, strength earlier in June raised the monthly average 4.6% from May. Applications to refinance a mortgage led that increase. [...]
Overall mortgage applications fell 2.7% last week following the prior
week's 5.9% shortfall. Nevertheless, strength earlier in June raised the
monthly average 4.6% from May. Applications to refinance a mortgage
led that increase. Though they fell 2.6% last week after a 7.2% decline,
the June average rose 7.8% from May. Applications to purchase a
home have been weaker. Declines during the last two weeks left the monthly
average down 3.4% from May.
Homebuyers leaned toward fixed rate loans last month, given the degree that interest rates have fallen. Though they fell during the last two weeks, the monthly average for fixed interest rate mortgage financing rose 4.8% this month following May's 14.5% jump. Applications for variable-rate financing rose a lesser 0.9% after May's 11.5% increase.
The effective fixed-interest rate on conventional 15-year mortgages slipped to 3.92% last week, near the record low of 3.88% reached last October. For 30-year mortgages, the rate was 4.70%. Interest rates on fixed 15-year and 30-year mortgages are closely correlated (near-90%) with the rate on 10-year Treasury securities. The effective rate on a 1-year adjustable rate mortgage was 7.07%.
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.
| BA Mortgage Applications (SA, 3/16/90=100) | 6/24/11 | 6/17/11 | 6/10/11 | Y/Y % | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 534.9 | 549.9 | 584.6 | -20.9 | 659.3 | 736.4 | 642.9 |
| Purchase | 180.3 | 185.8 | 191.1 | 5.8 | 199.8 | 263.5 | 345.4 |
| Refinancing | 2,604.4 | 2,675.2 | 2,883.7 | -27.9 | 3,348.1 | 3,509.2 | 2,394.1 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.92 | 3.96 | 3.94 | 4.42 (6/10) |
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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