The MBA mortgage applications index is 0.8 percent higher in the June 21 week. It is 11.4 percent higher than four weeks ago and 1.9 percent lower than a year earlier. The purchase index is 1.2 percent higher in the current week and 6.8 percent higher than four weeks ago and 13.2 percent lower than a year earlier. The refinancing index is 0.1 percent lower and is 19.1 percent higher than four weeks ago and 25.8 percent higher than a year earlier. In the June 21 week, refinancing accounted for 35.1 percent of mortgage applications compared to 35.2 percent in the prior week. Homebuyers are responding to the recent dip in rates for new mortgages, while refinancing activity lags as current mortgage holders are unwilling to give up a loan at a lower rate.

The contract rate for a 30-year fixed-rate mortgage is 6.93 percent in the current week. This is 1 basis point lower than the prior week, 12 basis points lower than four weeks ago, and 18 basis points higher than a year earlier. The contract rate for a 5-year adjustable-rate mortgage is 6.29 percent in the week. This is 2 basis points higher than the prior week, 35 basis points lower than four weeks ago, and 1 basis point higher than a year earlier. In the June 21 week, adjustable-rate mortgages accounted for 6.1 percent of mortgage applications compared to 6.0 percent in the prior week.

The fixed-rate mortgage index is 0.7 percent higher in the June 21 week. It is 11.8 percent higher than four weeks ago and 2.0 percent lower than this week last year. The adjustable-rate mortgage index is 2.5 percent higher and is 5.9 percent higher than four weeks ago and 1.4 percent lower than a year ago. Homebuyers prefer fixed-rate mortgages, but elevated prices mean that at least some are turning to adjustable-rate mortgages as a way to keep initial monthly payments lower.

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.