The MBA market index is up 7.4 percent in the March 3 week. It is down 16.5 percent from four weeks ago, and down 59.9 percent from a year earlier. Mortgage rates are up for the fifth week in a row, which normally would mean another decrease in applications.. MBA Deputy Chief Economist Kan said,"Even with higher rates, there was an uptick in applications last week, but this was in comparison to two weeks of declines to very low levels, including a holiday week. Comparing the application indices from a year ago, purchase applications were still down 42 percent, and refinance activity was down 76 percent. Many borrowers are waiting on the sidelines for rates to come back down."

The contract rate for a 30-year fixed rate mortgage is 6.79 percent in the March 3 week, up 8 basis points from the prior week, up 61 basis points from four weeks earlier, and up 270 basis points from a year earlier. It is also possible that consumers see rates heading back north of 7 percent and are willing to lock in a rate now, especially if they are able to negotiate on buying prices.

The purchase index is up 6.6 percent from the prior week, down 18.1 percent from four weeks earlier, and down 42.3 percent from a year ago. The refinance index is up 9.4 percent week-over-week, down 11.9 percent from four weeks ago, and down 76.1 percent from the same time last year.

The March 3 index for fixed rate mortgages is up 6.8 percent from one week ago, down 18.2 percent from four weeks earlier, and is 61.3 percent lower than a year ago. The index for adjustable rate mortgages is up 13.9 percent week-over-week, up 8.4 percent from four weeks ago, and down 34.3 percent from a year ago. The renewed use of ARMs suggests that homebuyers are taking the less costly option for an initial period in order to afford the home purchase.

The Mortgage Bankers' Association compiles various mortgage loan indexes. The purchase applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.

This provides a gauge of not only the demand for housing, but economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as the Mortgage Bankers Association purchase applications, investors can gain specific investment ideas as well as broad guidance for managing a portfolio.

Each time the construction of a new home begins, it translates to more construction jobs, and income which will be pumped back into the economy. Once a home is sold, it generates revenues for the home builder and the realtor. It brings a myriad of consumption opportunities for the buyer. Refrigerators, washers, dryers and furniture are just a few items new home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month.

Since the economic backdrop is the most pervasive influence on financial markets, housing construction has a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the MBA purchase applications index carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.