The MBA market index is up 3.7 percent in the April 21 week. It is down 4.6 percent from four weeks ago, and down 36.8 percent from a year earlier. Mortgage rates are up for the second week in a row. MBA Chief Economist Joel Kan said,"Activity was still nearly 28 percent below last year's pace, as high mortgage rates and low supply have slowed the market this year, even as home-price growth has decelerated in many markets across the country."

The contract rate for a 30-year fixed rate mortgage is up 12 basis points to 6.55 percent in the April 21 week, up 10 basis points from four weeks earlier, and up 118 basis points from a year earlier. Anticipation of at least one more rate increase in the fed funds rate by the FOMC with possible higher mortgage rates to follow may be motivating some buyers to act now.

The purchase index is up 4.6 percent from the prior week, down 2.1 percent from four weeks earlier, and down 28.0 percent from a year ago. The refinance index is 1.7 percent higher week-over-week, down 9.3 percent from four weeks ago, and down 50.8 percent from the same time last year.

The April 21 index for fixed rate mortgages is up 3.2 percent from one week ago, down 3.5 percent from four weeks earlier, and is 35.0 percent lower than a year ago. The index for adjustable rate mortgages is up 10.3 percent week-over-week, down 17.1 percent from four weeks ago, and down 54.6 percent from a year ago. Some homebuyers may be turning to adjustable rate mortgages in order to qualify for a home loan and/or improve at least the initial affordability of the 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.