| Actual | Previous | |
|---|---|---|
| Composite Index - W/W | 11.0% | 14.2% |
| Purchase Index - W/W | 1.4% | 5.4% |
| Refinance Index - W/W | 20.3% | 24.2% |
Highlights
The MBA mortgage applications index is 11.0 percent higher in the September 20 week. It is 30.5 percent higher than four weeks ago and 56.2 percent higher than a year earlier. The purchase index is 1.4 percent higher in the current week and 12.4 percent higher than four weeks ago and 2.3 percent higher than a year earlier. The refinancing index is 20.3 percent higher and is 50.3 percent higher than four weeks ago and 175.2 percent higher than a year earlier. In the September 20 week, refinancing accounted for 55.7 percent of mortgage applications compared to 51.2 percent in the prior week.
MBA Deputy Chief Economists Joel Kan said,"Mortgage applications increased to their highest level since July 2022, boosted by a 20 percent increase in refinance applications after a large increase the prior week. The 30-year fixed rate decreased for the eighth straight week to 6.13 percent, while the FHA rate decreased to 5.99 percent, breaking the psychologically important 6 percent level." He continued,"As a result of lower rates, week-over-week gains for both conventional and government refinance applications increased sharply. The refinance share of applications is now at 55.7 percent, and while the level of refinance activity is still modest compared to prior refi waves, they now account for the majority of applications, given the seasonal slowdown in purchase activity."
The fixed-rate mortgage index is 10.9 percent higher in the September 20 week. It is 30.0 percent higher than four weeks ago and 58.8 percent higher than this week last year. The adjustable-rate mortgage index is 12.0 percent higher and is 40.3 percent higher than four weeks ago and 23.6 percent higher than a year ago. While current rates are attractive for fixed rate mortgages, some borrowers may be using adjustable rates to keep initial monthly payments lower and planning on refinancing later to a similar or more favorable fixed rate.
The contract rate for a 30-year fixed-rate mortgage is 6.13 percent in the current week. This is 2 basis points lower than the prior week, 31 basis points lower than four weeks ago, and 128 basis points lower than a year earlier. The contract rate for a 5-year adjustable-rate mortgage is 5.76 percent in the week. This is 10 basis points higher than the prior week, 22 basis points lower than four weeks ago, and 71 basis points lower than a year earlier. In the September 20 week, adjustable-rate mortgages accounted for 5.9 percent of mortgage applications compared to 5.9 percent in the prior week.
MBA Deputy Chief Economists Joel Kan said,"Mortgage applications increased to their highest level since July 2022, boosted by a 20 percent increase in refinance applications after a large increase the prior week. The 30-year fixed rate decreased for the eighth straight week to 6.13 percent, while the FHA rate decreased to 5.99 percent, breaking the psychologically important 6 percent level." He continued,"As a result of lower rates, week-over-week gains for both conventional and government refinance applications increased sharply. The refinance share of applications is now at 55.7 percent, and while the level of refinance activity is still modest compared to prior refi waves, they now account for the majority of applications, given the seasonal slowdown in purchase activity."
The fixed-rate mortgage index is 10.9 percent higher in the September 20 week. It is 30.0 percent higher than four weeks ago and 58.8 percent higher than this week last year. The adjustable-rate mortgage index is 12.0 percent higher and is 40.3 percent higher than four weeks ago and 23.6 percent higher than a year ago. While current rates are attractive for fixed rate mortgages, some borrowers may be using adjustable rates to keep initial monthly payments lower and planning on refinancing later to a similar or more favorable fixed rate.
The contract rate for a 30-year fixed-rate mortgage is 6.13 percent in the current week. This is 2 basis points lower than the prior week, 31 basis points lower than four weeks ago, and 128 basis points lower than a year earlier. The contract rate for a 5-year adjustable-rate mortgage is 5.76 percent in the week. This is 10 basis points higher than the prior week, 22 basis points lower than four weeks ago, and 71 basis points lower than a year earlier. In the September 20 week, adjustable-rate mortgages accounted for 5.9 percent of mortgage applications compared to 5.9 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.
