The MBA mortgage applications index is up 5.4 percent in the September 15 week. It is up 4.0 percent from four weeks ago, and down 27.5 percent from a year earlier. MBA Deputy Chief Economist Joel Kan said,""Mortgage applications increased last week, despite the 30-year fixed rate edging back up to 7.31 percent its highest level in four weeks." He continued,"Purchase applications increased for conventional and FHA loans over the week but remained 26 percent lower than the same week a year ago, as homebuyers continue to face higher rates and limited for-sale inventory, which have made purchase conditions more challenging. Refinance applications also increased last week but are still almost 30 percent lower than the same week last year."

The purchase index is up 2.3 percent from the prior week, up 3.5 percent from four weeks earlier, and down 26.5 percent from a year ago. The refinance index is 13.2 percent higher week-over-week, up 4.6 percent from four weeks ago, and down 29.4 percent from the same time last year. Refinancing accounted for 31.6 percent of total applications in the week compared to 29.1 percent in the prior week.

The September 15 index for fixed rate mortgages is up 5.7 percent from one week ago, up 4.4 percent from four weeks earlier, and is 25.9 percent lower than a year ago. The index for adjustable-rate mortgages is up 2.2 percent week-over-week, down 1.3 percent from four weeks ago, and down 42.5 percent from a year ago. Adjustable-rate mortgages account for 7.2 percent of total applications in the September 15 week, down from 7.2 percent in the prior week. Buyers are opting for fixed rate mortgages despite the highest rates in more than 22 years.

The contract rate for a 30-year fixed rate mortgage is up 4 basis points to 7.31 percent in the September 15 week, unchanged from four weeks ago, and up 106 basis points from a year earlier. The rate for a 5-year adjustable-rate mortgage is 6.42 percent, down 17 basis points from the prior week, down 8 basis points from four weeks earlier, and up 128 basis points from the year-ago week.

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.