| Actual | Previous | |
|---|---|---|
| Composite Index - W/W | -4.1% | 2.9% |
| Purchase Index - W/W | -3.5% | 2.0% |
| Refinance Index - W/W | -5.4% | 4.8% |
Highlights
The MBA market index is down 4.1 percent in the March 31 week. It is up 8.1 percent from four weeks ago, and down 46.3 percent from a year earlier. Mortgage rates were down for the fourth week in a row, but were not enough to keep applications trending higher. MBA Chief Economist Fratantoni said,"Spring has arrived, but the housing market is missing the customary burst in listings and purchase activity that typically mark the season. After four weeks of increasing purchase application activity, volume declined a bit this week even with another small drop in mortgage rates."
The contract rate for a 30-year fixed rate mortgage is 6.40 percent in the March 31 week, down 5 basis points from the prior week, down 39 basis points from four weeks earlier, and up 150 basis points from a year earlier. Limited stocks of affordable homes"remains a challenge" Fratantoni noted. Refinancing of existing mortgages is weak due to higher rates which makes it a less attractive decision.
The purchase index is down 3.5 percent from the prior week, up 7.9 percent from four weeks earlier, and down 35.5 percent from a year ago. The refinance index is down 5.4 percent week-over-week, up 9.0 percent from four weeks ago, and down 59.1 percent from the same time last year.
The March 31 index for fixed rate mortgages is down 3.6 percent from one week ago, up 9.9 percent from four weeks earlier, and is 45.5 percent lower than a year ago. The index for adjustable rate mortgages is down 10.6 percent week-over-week, down 10.0 percent from four weeks ago, and down 42.3 percent from a year ago. The decline in the use of ARMs suggests that homebuyers are finding fixed rates more affordable with the continued dip in rates, even if not as may applications are being made.
The contract rate for a 30-year fixed rate mortgage is 6.40 percent in the March 31 week, down 5 basis points from the prior week, down 39 basis points from four weeks earlier, and up 150 basis points from a year earlier. Limited stocks of affordable homes"remains a challenge" Fratantoni noted. Refinancing of existing mortgages is weak due to higher rates which makes it a less attractive decision.
The purchase index is down 3.5 percent from the prior week, up 7.9 percent from four weeks earlier, and down 35.5 percent from a year ago. The refinance index is down 5.4 percent week-over-week, up 9.0 percent from four weeks ago, and down 59.1 percent from the same time last year.
The March 31 index for fixed rate mortgages is down 3.6 percent from one week ago, up 9.9 percent from four weeks earlier, and is 45.5 percent lower than a year ago. The index for adjustable rate mortgages is down 10.6 percent week-over-week, down 10.0 percent from four weeks ago, and down 42.3 percent from a year ago. The decline in the use of ARMs suggests that homebuyers are finding fixed rates more affordable with the continued dip in rates, even if not as may applications are being made.
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.
