| Actual | Previous | |
|---|---|---|
| Composite Index - W/W | 3.0% | 0.5% |
| Purchase Index - W/W | 2.8% | 1.5% |
| Refinance Index - W/W | 3.3% | -2.1% |
Highlights
The MBA market index is up 3.0 percent in the June 23 week. It is up 9.5 percent from four weeks ago, and down 33.0 percent from a year earlier. MBA Deputy Chief Economist Joel Kan said,"Purchase applications increased for the third consecutive week to the highest level of activity since early May but remained more than 20 percent lower than year ago levels. New home sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home market. Existing-home sales continued to be held back by a lack of for-sale inventory as many potential sellers are holding on to their lower-rate mortgages."
The purchase index is up 2.8 percent from the prior week, up 10.3 percent from four weeks earlier, and down 29.9 percent from a year ago. The refinance index is 3.3 percent higher week-over-week, up 6.5 percent from four weeks ago, and down 39.5 percent from the same time last year.
The June 23 index for fixed rate mortgages is up 3.2 percent from one week ago, up 10.4 percent from four weeks earlier, and is 30.0 percent lower than a year ago. The index for adjustable rate mortgages is up a scant 0.1 percent week-over-week, down 2.0 percent from four weeks ago, and down 59.6 percent from a year ago.
The contract rate for a 30-year fixed rate mortgage is up 2 basis points to 6.75 percent in the June 23 week, but down 16 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 6.28 percent, up 19 basis points from the prior week, up 86 basis points from four weeks earlier, and up 131 basis points from the year-ago week.
The applications index is up for the third week in a row as homeowners remain in the market, possibly trying to get ahead of future higher mortgage rates. Consumers continue to overwhelmingly prefer a fixed rate to an adjustable rate mortgage.
The purchase index is up 2.8 percent from the prior week, up 10.3 percent from four weeks earlier, and down 29.9 percent from a year ago. The refinance index is 3.3 percent higher week-over-week, up 6.5 percent from four weeks ago, and down 39.5 percent from the same time last year.
The June 23 index for fixed rate mortgages is up 3.2 percent from one week ago, up 10.4 percent from four weeks earlier, and is 30.0 percent lower than a year ago. The index for adjustable rate mortgages is up a scant 0.1 percent week-over-week, down 2.0 percent from four weeks ago, and down 59.6 percent from a year ago.
The contract rate for a 30-year fixed rate mortgage is up 2 basis points to 6.75 percent in the June 23 week, but down 16 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 6.28 percent, up 19 basis points from the prior week, up 86 basis points from four weeks earlier, and up 131 basis points from the year-ago week.
The applications index is up for the third week in a row as homeowners remain in the market, possibly trying to get ahead of future higher mortgage rates. Consumers continue to overwhelmingly prefer a fixed rate to an adjustable rate mortgage.
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.
