| Actual | Previous | |
|---|---|---|
| Composite Index - W/W | -1.2% | 3.7% |
| Purchase Index - W/W | -2.0% | 4.6% |
| Refinance Index - W/W | 0.8% | 1.7% |
Highlights
The MBA market index is down 1.2 percent in the April 28 week. It is down 1.6 percent from four weeks ago, and down 39.1 percent from a year earlier. The slightly lower pace of applications reflects overall challenges in home affordability despite a dip in home mortgage rates in the past week. MBA Deputy chief Economist Joel Kan said,"Elevated rates continue to both impact homebuyer affordability and weaken demand for refinancing. Home purchase activity has been very sensitive to rates and local market trends, including the very low supply of existing-home inventory. However, newly constructed homes account for a growing share of inventory, giving more options for prospective buyers."
The contract rate for a 30-year fixed rate mortgage is down 5 basis points to 6.50 percent in the April 28 week, up 10 basis points from four weeks earlier, and up 118 basis points from a year earlier.
The purchase index is down 2.0 percent from the prior week, down 0.5 percent from four weeks earlier, and down 32.2 percent from a year ago. The refinance index is 0.8 percent higher week-over-week, down 3.4 percent from four weeks ago, and down 52.2 percent from the same time last year. Higher mortgage rates have reduced demand for home refinancings, but some are occurring on dips in mortgage rates.
The April 28 index for fixed rate mortgages is down 1.8 percent from one week ago, down 1.7 percent from four weeks earlier, and is 37.7 percent lower than a year ago. The index for adjustable rate mortgages is up 7.7 percent week-over-week, down 0.1 percent from four weeks ago, and down 52.2 percent from a year ago. Some homebuyers are turning to adjustable rate mortgages in order to qualify for a home loan and/or improve at least the initial affordability of the purchase. Limited inventories of new and existing homes mean that prices are not falling as much as they might otherwise in a soft market.
The contract rate for a 30-year fixed rate mortgage is down 5 basis points to 6.50 percent in the April 28 week, up 10 basis points from four weeks earlier, and up 118 basis points from a year earlier.
The purchase index is down 2.0 percent from the prior week, down 0.5 percent from four weeks earlier, and down 32.2 percent from a year ago. The refinance index is 0.8 percent higher week-over-week, down 3.4 percent from four weeks ago, and down 52.2 percent from the same time last year. Higher mortgage rates have reduced demand for home refinancings, but some are occurring on dips in mortgage rates.
The April 28 index for fixed rate mortgages is down 1.8 percent from one week ago, down 1.7 percent from four weeks earlier, and is 37.7 percent lower than a year ago. The index for adjustable rate mortgages is up 7.7 percent week-over-week, down 0.1 percent from four weeks ago, and down 52.2 percent from a year ago. Some homebuyers are turning to adjustable rate mortgages in order to qualify for a home loan and/or improve at least the initial affordability of the purchase. Limited inventories of new and existing homes mean that prices are not falling as much as they might otherwise in a soft market.
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.
