According to the Mortgage Bankers Association, the total number of mortgage applications more than doubled last week as borrowers rushed to take advantage of lower interest rates and when the Fed announced that it would buy GSE debt and MBS.

The index of applications to refinance a home mortgage tripled w/w due to the government's guarantee.

The effective interest rate on a conventional 15-year mortgage plummeted last week to 5.45%, down nearly a full percentage point from the October average. For a 30-year mortgage rates also fell sharply to 5.70%. Interest rates on 15 and 30 year mortgages are closely correlated (>90%) with the rate on 10-year Treasury securities. For an adjustable rate 1-Year mortgage the rate dropped less to 6.74% after having averaged 6.89% during October.

Applications for a mortgage to purchase a home also surged by nearly one half due to lower rates.

During the last ten years there has been a (negative) 79% correlation between the level of applications for purchase and the effective interest rate on a 30-year mortgage. Moreover, during the last ten years there has been a 61% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.

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.

Today's speech titled Housing, Mortgage Markets, and Foreclosures given by Fed Chairman Ben S. Bernanke can be found here.