The MBA market index is up 0.5 percent in the June 16 week. It is up 2.3 percent from four weeks ago, and down 34.5 percent from a year earlier. MBA Deputy Chief Economist Joel Kan said,"Purchase applications increased, driven by a 2 percent gain in conventional purchase applications and a 3 percent increase in FHA purchase activity," He continued,"First-time homebuyers account for a large share of FHA purchase loans, and this increase is a sign that while buyer interest is there, activity continues to be constrained by low levels of affordable inventory."

The purchase index is up 1.5 percent from the prior week, up 4.6 percent from four weeks earlier, and down 31.8 percent from a year ago. The refinance index is 2.1 percent lower week-over-week, down 4.0 percent from four weeks ago, and down 40.4 percent from the same time last year.

The June 16 index for fixed rate mortgages is up 0.7 percent from one week ago, up 2.9 percent from four weeks earlier, and is 31.3 percent lower than a year ago. The index for adjustable rate mortgages is down 2.6 percent week-over-week, down 4.9 percent from four weeks ago, and down 61.4 percent from a year ago.

The contract rate for a 30-year fixed rate mortgage is down 4 basis points to 6.73 percent in the June 16 week, but up 4 basis points from four weeks ago, and up 75 basis points from a year earlier. The rate for a 5-year adjustable rate mortgage is 6.09 percent, up 19 basis points from the prior week, up 36 basis points from four weeks earlier, and up 131 basis points from the year-ago week.

It appears that homebuyers entering the market now have come to realize that the exceptionally low rates in 2021 and early 2022 are not coming back any time soon. They appear resigned that financing a home will be more costly in the current economy. They will be watchful for dips in rates that could improve home affordability, but with limited inventory on the market, finding bargains is difficult. Those taking out mortgage now could form part of a wave of refinancing later should the 30-year fixed rate fall at or below the 6 percent-mark.

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.