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Economy in Brief

Mortgage Applications Drift At Low Level
by Tom Moeller June 23, 2004

The index of mortgage applications compiled by the Mortgage Bankers Association ticked up 0.1% (-61.3% y/y) last week. So far in June applications are 11.0% below the May average which fell 18.9% from April.

Applications to refinance mortgages fell 1.7% (-82.3% y/y) last week and so far in June are 11.6% below May. Purchase applications rose for the second consecutive week, up 1.1% (+10.5% y/y), but were down 4.1% from May.

During the last ten years there has been a 63% correlation between the y/y change in purchase applications and the change in new plus existing home sales.

The effective interest rate on a conventional 30-Year mortgage fell to 6.46% from 6.60% the week earlier and so far this month has averaged the same 6.53% as in May. The effective rate on a 15-year mortgage fell to 5.94%.

"Mortgage Refinancing" is a paper published last year by the Federal Reserve Bank of San Francisco. It can be viewed here.

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 accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site here.

MBA Mortgage Applications (3/16/90=100) 06/18/04 06/11/04 2003 2002 2001
Total Market Index 601.2 600.6 1,067.9 799.7 625.6
  Purchase 454.5 449.5 395.1 354.7 304.9
  Refinancing 1,454.6 1,479.6 4,981.8 3,388.0 2,491.0
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