Global| Jul 25 2012U.S. Mortgage Applications Tick Up As Rates Edge Down
by:Tom Moeller
|in:Economy in Brief
Summary
Lower interest rates continue to generate business for mortgage lenders. The Mortgage Bankers Association index of total mortgage applications rose 0.9% last week (78.7% y/y) on top of the prior week's 16.9% jump. The figures are [...]
Lower interest rates continue to generate business for mortgage lenders. The Mortgage Bankers Association index of total mortgage applications rose 0.9% last week (78.7% y/y) on top of the prior week's 16.9% jump. The figures are close to the high in this cycle. Applications to refinance have led the gain. Last week, they rose 1.8% w/w and have more than doubled since last year. Conversely, home purchase applications fell 3.2% last week (5.4% y/y). Applications for fixed interest rate loans rose 0.9% w/w and were up more than three-quarters y/y. Variable rate loans gained 1.3% w/w and increased 18.7% y/y.
The effective rate on fixed-interest, conventional 15-year mortgages fell w/w to 3.19%, nearly the lowest since the early-1950s and down from the 4.50% high in February of last year. The effective rate on a 30-year fixed rate loan slipped to 3.86%. On a 30-year Jumbo loan, the effective rate was stable w/w at 4.08%. 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 fell to 2.81% and was down from its 3.93% high during February of last year.
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) | 07/20/12 | 07/13/12 | 07/06/12 | Y/Y% | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Total Market Index | 943.6 | 935.4 | 799.9 | 78.7 | 572.3 | 659.3 | 736.4 |
| Purchase | 186.2 | 192.4 | 192.6 | 5.4 | 182.6 | 199.8 | 263.5 |
| Refinancing | 5,411.6 | 5,314.4 | 4,369.3 | 109.8 | 2,858.4 | 3,348.1 | 3,509.2 |
| 15-Year Mortgage Effective Interest Rate (%) | 3.19 | 3.24 | 3.26 | 3.92 (7/11) |
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.
