| Actual | Previous | |
|---|---|---|
| Composite Index - W/W | -10.8% | -0.1% |
| Purchase Index - W/W | -5.1% | 5.0% |
| Refinance Index - W/W | -18.5% | -6.3% |
Highlights
The MBA mortgage applications index is 10.8 percent lower in the November 1 week. It is 31.0 percent lower than four weeks ago and 15.4 percent higher than a year earlier. The purchase index is 5.1 percent lower in the current week and 12.3 percent lower than four weeks ago and 1.4 percent higher than a year earlier. The refinancing index is 18.5 percent lower and is 48.5 percent lower than four weeks ago and 47.9 percent higher than a year earlier. In the November 1 week, refinancing accounted for 39.9 percent of mortgage applications compared to 43.1 percent in the prior week.
Six weeks in a row of rising mortgage rates have cut into demand for new mortgages and choked off refinancing activity. Borrowers who apply for new mortgages are once more looking at adjustable rate loans to lower initial monthly payments. However, it is likely that some potential homebuyers are waiting to see if rates decline again before entering the housing market.
The fixed-rate mortgage index is 11.3 percent lower in the November 1 week. It is 31.8 percent lower than four weeks ago and 19.0 percent higher than this week last year. The adjustable-rate mortgage index is 2.2 percent lower and is 18.3 percent lower than four weeks ago and 17.7 percent lower than a year ago.
The contract rate for a 30-year fixed-rate mortgage is 6.81 percent in the current week. This is 8 basis points higher than the prior week, 45 basis points higher than four weeks ago, and 80 basis points lower than a year earlier. The contract rate for a 5-year adjustable-rate mortgage is 6.05 percent in the week. This is 15 basis points lower than the prior week, 1 basis points lower than four weeks ago, and 71 basis points lower than a year earlier. In the November 1 week, adjustable-rate mortgages accounted for 7.0 percent of mortgage applications compared to 6.4 percent in the prior week.
Six weeks in a row of rising mortgage rates have cut into demand for new mortgages and choked off refinancing activity. Borrowers who apply for new mortgages are once more looking at adjustable rate loans to lower initial monthly payments. However, it is likely that some potential homebuyers are waiting to see if rates decline again before entering the housing market.
The fixed-rate mortgage index is 11.3 percent lower in the November 1 week. It is 31.8 percent lower than four weeks ago and 19.0 percent higher than this week last year. The adjustable-rate mortgage index is 2.2 percent lower and is 18.3 percent lower than four weeks ago and 17.7 percent lower than a year ago.
The contract rate for a 30-year fixed-rate mortgage is 6.81 percent in the current week. This is 8 basis points higher than the prior week, 45 basis points higher than four weeks ago, and 80 basis points lower than a year earlier. The contract rate for a 5-year adjustable-rate mortgage is 6.05 percent in the week. This is 15 basis points lower than the prior week, 1 basis points lower than four weeks ago, and 71 basis points lower than a year earlier. In the November 1 week, adjustable-rate mortgages accounted for 7.0 percent of mortgage applications compared to 6.4 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.
