| Actual | Previous | |
|---|---|---|
| Composite Index - W/W | 6.5% | 7.4% |
| Purchase Index - W/W | 7.3% | 6.6% |
| Refinance Index - W/W | 4.8% | 9.4% |
Highlights
The MBA market index is up 6.5 percent in the March 10 week. It is down 0.2 percent from four weeks ago, and down 56.8 percent from a year earlier. Mortgage rates were down slightly, which helped spur some application activity. However, applications are running nearly 40 percent below this time last year. MBA Deputy Chief Economist Kan said,"Treasury yields declined late last week, as market concerns over bank closures and the potential for broader ripple effects triggered a flight to safety in Treasury bonds. This decline pushed mortgage rates for all loan types lower."
The contract rate for a 30-year fixed rate mortgage is 6.71 percent in the March 10 week, down 8 basis points from the prior week, up 32 basis points from four weeks earlier, and up 244 basis points from a year earlier. Some potential home buyers are prequalifying now and locking in a more affordable rate before they start shopping this spring.
The purchase index is up 7.3 percent from the prior week, down 2.0 percent from four weeks earlier, and down 38.6 percent from a year ago. The refinance index is up 4.8 percent week-over-week, up 5.1 percent from four weeks ago, and down 74.2 percent from the same time last year.
The March 10 index for fixed rate mortgages is up 6.6 percent from one week ago, down 1.9 percent from four weeks earlier, and is 58.1 percent lower than a year ago. The index for adjustable rate mortgages is up 5.2 percent week-over-week, up 23.4 percent from four weeks ago, and down 34.2 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. While the escalation in home prices has eased, and in some cases prices are more negotiable, limited supplies of the most sought-after units is keeping prices elevated for now.
The contract rate for a 30-year fixed rate mortgage is 6.71 percent in the March 10 week, down 8 basis points from the prior week, up 32 basis points from four weeks earlier, and up 244 basis points from a year earlier. Some potential home buyers are prequalifying now and locking in a more affordable rate before they start shopping this spring.
The purchase index is up 7.3 percent from the prior week, down 2.0 percent from four weeks earlier, and down 38.6 percent from a year ago. The refinance index is up 4.8 percent week-over-week, up 5.1 percent from four weeks ago, and down 74.2 percent from the same time last year.
The March 10 index for fixed rate mortgages is up 6.6 percent from one week ago, down 1.9 percent from four weeks earlier, and is 58.1 percent lower than a year ago. The index for adjustable rate mortgages is up 5.2 percent week-over-week, up 23.4 percent from four weeks ago, and down 34.2 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. While the escalation in home prices has eased, and in some cases prices are more negotiable, limited supplies of the most sought-after units is keeping prices elevated for now.
Definition
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.
Description
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.
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.
