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Economy in Brief

Mortgage Applications Rebounded
by Tom Moeller October 20, 2004

Mortgage applications rebounded last week from the prior period's slump, according to the Mortgage Bankers Association (MBA). The 7.9% w/w rise did not, however, recoup all of the prior week's 9.2% fall and so far in October applications are just 0.2% higher than the September average.

Purchase applications rose 5.8% following two weeks of sharp decline. So far in October purchase apps are 2.6% below the September average. During the last ten years there has been a 60% correlation between the y/y change in purchase applications and the change in new plus existing home sales.

Applications to refinance rebounded 10.6% w/w and for the month are 3.9% ahead of September.

The effective interest rate on a conventional 30-year mortgage slipped to 5.90% from 5.95% the prior week. The effective rate on a 15-year mortgage fell to 5.34%.

"The Nationalization of Housing Finance" from the Federal Reserve Bank of St. Louis is available here.

Fed Chairman Greenspan's comments made yesterday on the mortgage market and consumer debt can be found 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) 10/15/04 10/08/04 Y/Y 2003 2002 2001
Total Market Index 709.9 658.2 8.7% 1,067.9 799.7 625.6
  Purchase 461.4 436.3 19.5% 395.1 354.7 304.9
  Refinancing 2,155.2 1,949.2 -2.2% 4,981.8 3,388.0 2,491.0
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