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Economy in Brief
U.S. Mortgage Applications Continued to Slide Amid Higher Rates
The biggest declines have been in refinancing activity, while applications for purchase are just starting to crack...
UK Inflation Jumps
Inflation is at the highest rate since the series began in January of 1989...
U.S. Industrial Production Much Stronger than Expected in April
The increase in manufacturing output in April was once again led by motor vehicle and parts production...
U.S. Retail Sales Posted Solid Rise in April
Notwithstanding falling real incomes and declining confidence measures, consumer spending posted a solid increase...
U.S. Home Builder Index Took a Steep Drop in May
This is the fifth straight month that builder sentiment has declined...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits and Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation & Fed Policy: A Relationship Which Should Worry The Fed And Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Tom Moeller December 21, 2005
The Mortgage Bankers Association reported that the total number of mortgage applications dropped again last week by 4.0% following a 5.7% decline the week prior. The decline was to the lowest level in nearly a year and dropped December 3.3% below November.
Purchase applications were notably weak. A 5.2% decline followed the prior week's 3.5% drop and was to the lowest level since late October. The December average of purchase applications fell to just a 0.5% gain versus November.
During the last ten years there has been a 50% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales
Applications to refinance fell 1.6% on top of the prior week's 9.7% slide and lowered the December average 9.6% below November.
The effective interest rate on a conventional 30-year mortgage fell again to 6.45% from 6.53% the prior week. Rates averaged 6.52% in November and averaged 5.81% in June. The effective rate on a 15-year mortgage also fell to 6.07%. The interest rates on 15 and 30 year mortgages are closely correlated (>90%) with the rate on 10 year Treasury securities.
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) | 12/16/05 | 12/09/05 | Y/Y | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|
Total Market Index | 594.6 | 619.3 | -13.7% | 735.1 | 1,067.9 | 799.7 |
Purchase | 453.1 | 477.9 | -3.8% | 454.5 | 395.1 | 354.7 |
Refinancing | 1,418.1 | 1,441.8 | -27.6% | 2,366.8 | 4,981.8 | 3,388.0 |