| Actual | Previous | |
|---|---|---|
| Composite Index - W/W | 7.2% | -1.4% |
| Purchase Index - W/W | 7.6% | -1.7% |
| Refinance Index - W/W | 6.0% | -0.7% |
Highlights
The MBA market index is up 7.2 percent in the June 9 week. It is down 2.8 percent from four weeks ago, and down 32.1 percent from a year earlier. MBA Deputy Chief Economist Joel Kan said,"Mortgage applications were up over the week, but remained well below levels from a year ago." He continued,"Rates that are still more than a percentage point higher than a year ago, and low for-sale inventory continue to constrain homebuying activity in many markets. The average loan size on a purchase loan decreased for the third straight week, as we continue to see more first-time homebuyer activity in the purchase market."
The purchase index is up 7.6 percent from the prior week, down 1.3 percent from four weeks earlier, and down 27.5 percent from a year ago. The refinance index is 6.0 percent higher week-over-week, down 7.3 percent from four weeks ago, and down 41.0 percent from the same time last year.
The June 9 index for fixed rate mortgages is up 7.6 percent from one week ago, down 2.8 percent from four weeks earlier, and is 30.9 percent lower than a year ago. The index for adjustable rate mortgages is up 2.1 percent week-over-week, down 4.2 percent from four weeks ago, and down 45.9 percent from a year ago.
The contract rate for a 30-year fixed rate mortgage is down 4 basis points to 6.77 percent in the June 9 week, but up 20 basis points from four weeks ago, and up 112 basis points from a year earlier. The rate for a 5-year adjustable rate mortgage is 5.90 percent, down 3 basis points from the prior week, up 19 basis points from 4 weeks earlier, and up 133 basis points from the year-ago week.
While potential homebuyers are keeping a close eye out for dips in the mortgage rate to improve affordability, the lack of inventory means that prices are not falling much if at all for the more sought-after units/locations for what does come on to the market. Many first-time buyers are opting for new construction, especially in the multi-unit sector which tend to sell a lower price point.
The purchase index is up 7.6 percent from the prior week, down 1.3 percent from four weeks earlier, and down 27.5 percent from a year ago. The refinance index is 6.0 percent higher week-over-week, down 7.3 percent from four weeks ago, and down 41.0 percent from the same time last year.
The June 9 index for fixed rate mortgages is up 7.6 percent from one week ago, down 2.8 percent from four weeks earlier, and is 30.9 percent lower than a year ago. The index for adjustable rate mortgages is up 2.1 percent week-over-week, down 4.2 percent from four weeks ago, and down 45.9 percent from a year ago.
The contract rate for a 30-year fixed rate mortgage is down 4 basis points to 6.77 percent in the June 9 week, but up 20 basis points from four weeks ago, and up 112 basis points from a year earlier. The rate for a 5-year adjustable rate mortgage is 5.90 percent, down 3 basis points from the prior week, up 19 basis points from 4 weeks earlier, and up 133 basis points from the year-ago week.
While potential homebuyers are keeping a close eye out for dips in the mortgage rate to improve affordability, the lack of inventory means that prices are not falling much if at all for the more sought-after units/locations for what does come on to the market. Many first-time buyers are opting for new construction, especially in the multi-unit sector which tend to sell a lower price point.
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.
