| Actual | Previous | |
|---|---|---|
| Composite Index - W/W | 14.2% | 1.4% |
| Purchase Index - W/W | 5.4% | 1.8% |
| Refinance Index - W/W | 24.2% | 0.9% |
Highlights
The MBA mortgage applications index is 14.2 percent higher in the September 13 week. It is 18.2 percent higher than four weeks ago and 38.9 percent higher than a year earlier. The purchase index is 5.4 percent higher in the current week and 11.9 percent higher than four weeks ago and 0.6 percent lower than a year earlier. The refinancing index is 24.2 percent higher and is 24.8 percent higher than four weeks ago and 126.6 percent higher than a year earlier. In the September 13 week, refinancing accounted for 51.2 percent of mortgage applications compared to 46.7 percent in the prior week.
Mortgage applications reflect not only renewed demand for new loans, but also another wave of refinancing. Also notable is that demand is up sharply for adjustable-rate mortgages as well as fixed-rate loans. Some borrowers may be using adjustable-rate mortgages to make the immediate purchase more affordable while betting on a chance to refinance at a fixed rate similar or lower rate later. Some current mortgage holders may be more willing to put their home on the market now to up- or downgrade to another home at present rates even if it means a higher rate than they have locked in. Those with a current mortgage may want to refinance to take out some of the equity in the present home and see rates nearer 6 percent as more reasonable.
MBA Deputy Chief Economists Joel Kan said,"Application activity was up significantly last week, as market expectations of a rate cut from the Fed pulled mortgage rates lower. The 30-year fixed mortgage rate, at 6.15 percent, is now at its lowest since September 2022 and is more than a full percentage point lower than a year ago." He also said,"Homebuyers are seeing improving affordability conditions, sparked by lower rates and slower home-price growth."
The fixed-rate mortgage index is 13.6 percent higher in the September 13 week. It is 17.6 percent higher than four weeks ago and 40.9 percent higher than this week last year. The adjustable-rate mortgage index is 23.9 percent higher and is 27.0 percent higher than four weeks ago and 12.8 percent higher than a year ago.
The contract rate for a 30-year fixed-rate mortgage is 6.15 percent in the current week. This is 14 basis points lower than the prior week, 35 basis points lower than four weeks ago, and 116 basis points lower than a year earlier. The contract rate for a 5-year adjustable-rate mortgage is 5.66 percent in the week. This is 19 basis points lower than the prior week, 59 basis points lower than four weeks ago, and 76 basis points lower than a year earlier. in the September 13 week, adjustable-rate mortgages accounted for 5.9 percent of mortgage applications compared to 5.4 percent in the prior week.
Mortgage applications reflect not only renewed demand for new loans, but also another wave of refinancing. Also notable is that demand is up sharply for adjustable-rate mortgages as well as fixed-rate loans. Some borrowers may be using adjustable-rate mortgages to make the immediate purchase more affordable while betting on a chance to refinance at a fixed rate similar or lower rate later. Some current mortgage holders may be more willing to put their home on the market now to up- or downgrade to another home at present rates even if it means a higher rate than they have locked in. Those with a current mortgage may want to refinance to take out some of the equity in the present home and see rates nearer 6 percent as more reasonable.
MBA Deputy Chief Economists Joel Kan said,"Application activity was up significantly last week, as market expectations of a rate cut from the Fed pulled mortgage rates lower. The 30-year fixed mortgage rate, at 6.15 percent, is now at its lowest since September 2022 and is more than a full percentage point lower than a year ago." He also said,"Homebuyers are seeing improving affordability conditions, sparked by lower rates and slower home-price growth."
The fixed-rate mortgage index is 13.6 percent higher in the September 13 week. It is 17.6 percent higher than four weeks ago and 40.9 percent higher than this week last year. The adjustable-rate mortgage index is 23.9 percent higher and is 27.0 percent higher than four weeks ago and 12.8 percent higher than a year ago.
The contract rate for a 30-year fixed-rate mortgage is 6.15 percent in the current week. This is 14 basis points lower than the prior week, 35 basis points lower than four weeks ago, and 116 basis points lower than a year earlier. The contract rate for a 5-year adjustable-rate mortgage is 5.66 percent in the week. This is 19 basis points lower than the prior week, 59 basis points lower than four weeks ago, and 76 basis points lower than a year earlier. in the September 13 week, adjustable-rate mortgages accounted for 5.9 percent of mortgage applications compared to 5.4 percent in the prior week.
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.
