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Economy in Brief

U.S. Mortgage Applications Decline Again With Higher Interest Rates
by Tom Moeller  March 28, 2012

More of a depressing effect on mortgage loan applications from higher interest rates was evident last week. The index of total mortgage applications fell 2.7% to 663.7 (+36.8% y/y), down for the seventh straight week. Fewer applications to refinance have led the decline. Last week they were off 4.6%. This sixth straight weekly decline amounts to a reduction of nearly one-quarter from the peak. Home purchase applications rose 3.3% (1.1% y/y). Applications remained 60% lower versus the peak in late-2007. Fixed interest rate loans fell sharply w/w with higher rates.

The effective rate on fixed-interest, conventional 15-year mortgages ticked up w/w to 3.60% versus its February low of 3.43%. The effective rate on a 30-year fixed rate loan similarly rose to 4.36%. On a 30-year Jumbo the effective rate was 4.67%. Though it's narrowed slightly of late, the spread between 15- and 30-year loan rates continued wide by historical standards. The effective interest rate on an adjustable 5-year mortgage increased to 3.15%, its highest since early December.

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. The figures for weekly mortgage applications are available in Haver's SURVEYW database.

MBA Mortgage Applications (SA, 3/16/90=100) 03/23/12 03/16/12 03/09/12 Y/Y % 2011 2010 2009
Total Market Index 663.7 681.9 736.5 36.8 572.3 659.3 736.4
 Purchase 190.6 184.6 186.5 1.1 182.6 199.8 263.5
 Refinancing 3,438.6 3,603.5 3,971.1 54.7 2,858.4 3,348.1 3,509.2
15-Year Mortgage Effective Interest Rate (%) 3.60 3.57 3.44 4.34
3.97 4.39 4.85
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