| Actual | Previous | |
|---|---|---|
| Composite Index - W/W | 2.9% | 3.0% |
| Purchase Index - W/W | 2.0% | 2.2% |
| Refinance Index - W/W | 4.8% | 4.9% |
Highlights
The MBA market index is up 2.9 percent in the March 24 week. It is up 21.2 percent from four weeks ago, and down 46.5 percent from a year earlier. Mortgage rates were down for the third week in a row, which helped maintain application activity. MBA Deputy Chief Economist Kan said,"While the 30-year fixed rate remained 1.65 percentage points higher than a year ago, homebuyers responded, leading to a fourth straight increase in purchase applications. Home-price growth has slowed markedly in many parts of the country, which has helped to improve buyers' purchasing power. Purchase applications remain over 30 percent behind last year's pace, but recent increases, along with data from other sources showing an uptick in home sales, is a welcome development."
The contract rate for a 30-year fixed rate mortgage is 6.45 percent in the March 24 week, down 3 basis points from the prior week, down 26 basis points from four weeks earlier, and up 165 basis points from a year earlier.
The purchase index is up 2.0 percent from the prior week, up 19.3 percent from four weeks earlier, and down 35.3percent from a year ago. The refinance index is up 4.8 percent week-over-week, up 26.0 percent from four weeks ago, and down 61.1 percent from the same time last year. Kan noted,"Refinance activity also picked up last week, but remains 61 percent below last year's pace. Most homeowners still have rates significantly lower than current levels, leaving only a small pool of borrowers with an incentive to refinance."
The March 24 index for fixed rate mortgages is up 3.8 percent from one week ago, up 21.7 percent from four weeks earlier, and is 47.1 percent lower than a year ago. The index for adjustable rate mortgages is down 7.7 percent week-over-week, up 14.7 percent from four weeks ago, and down 38.1 percent from a year ago. The decline in the use of ARMs suggests that homebuyers are finding fixed rates more affordable, especially with the advantage of locking in monthly mortgage costs.
The contract rate for a 30-year fixed rate mortgage is 6.45 percent in the March 24 week, down 3 basis points from the prior week, down 26 basis points from four weeks earlier, and up 165 basis points from a year earlier.
The purchase index is up 2.0 percent from the prior week, up 19.3 percent from four weeks earlier, and down 35.3percent from a year ago. The refinance index is up 4.8 percent week-over-week, up 26.0 percent from four weeks ago, and down 61.1 percent from the same time last year. Kan noted,"Refinance activity also picked up last week, but remains 61 percent below last year's pace. Most homeowners still have rates significantly lower than current levels, leaving only a small pool of borrowers with an incentive to refinance."
The March 24 index for fixed rate mortgages is up 3.8 percent from one week ago, up 21.7 percent from four weeks earlier, and is 47.1 percent lower than a year ago. The index for adjustable rate mortgages is down 7.7 percent week-over-week, up 14.7 percent from four weeks ago, and down 38.1 percent from a year ago. The decline in the use of ARMs suggests that homebuyers are finding fixed rates more affordable, especially with the advantage of locking in monthly mortgage costs.
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.
