Global| Feb 10 2010U.S. Weekly Mortgage Applications Slip
by:Tom Moeller
|in:Economy in Brief
Summary
The Mortgage Bankers Association reported that mortgage applications slipped 1.2% last week after a 21.0% jump at the end of January. As a result, applications began February up sharply from last month. Applications to refinance [...]
The Mortgage
Bankers Association reported that mortgage applications slipped 1.2%
last week after a 21.0% jump at the end of January. As a result,
applications began February up sharply from last month.
Applications to refinance mortgages increased 1.4% last week and were double the June low due to rate declines. Applications to purchase a home have not shared that degree of strength. They fell 7.0% last week after declining in January from December. The volatility in the numbers likely reflects the expiration of an up-to $8,000 Federal tax credit for first-time homebuyers which was extended to April. During the last ten years there has been a 51% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales. The correlation has lessened recently.
The effective fixed
interest rate on conventional 15-year mortgages slipped last week to
4.57%. That equaled the November low and was down from the June average
of 5.21%. 
For 30-year mortgages the rate ticked up last week to 5.16%
from a November average of 5.06%. Rates reached a high of 5.79% in
early-June. Interest rates on fixed 15-year and 30-year mortgages are
closely correlated (near-90%) with the rate on 10-year Treasury
securities. Rates on adjustable one-year mortgages fell to 6.64% last
week from a November average of 6.81%.
Since a December low, the number of fixed-rate mortgages has risen by one third and roughly equaled the rise in adjustable-rate mortgage applications.
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. Visit the Mortgage Bankers Association site here. The figures for weekly mortgage applications are available in Haver's SURVEYW database.
Federal Reserve's exit strategy is this morning's House testimony by Fed Chairman Ben S. Bernanke and it can be found here.
| MBA Mortgage Applications (SA, 3/16/90=100) | 02/05/10 | 01/29/10 | Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|
| Total Market Index | 613.1 | 620.7 | 2.1% | 736.4 | 642.9 | 652.6 |
| Purchase | 221.2 | 237.8 | -6.2 | 263.5 | 345.4 | 424.9 |
| Refinancing | 2,893.9 | 2,854.8 | 6.3 | 3,509.2 | 2,394.1 | 1,997.9 |
| 15-Year Mortgage Effective Interest Rate (%) | 4.57 | 4.62 | 5.07 (02/09) | 4.85 | 5.9 | 6.2 |
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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