The MBA mortgage applications index is 0.5 percent higher in the November 8 week. It is 16.4 percent lower than four weeks ago and 12.8 percent higher than a year earlier. The purchase index is 1.9 percent higher in the current week and 3.7 percent lower than four weeks ago and 0.1 percent higher than a year earlier. The refinancing index is 1.5 percent lower and is 31.1 percent lower than four weeks ago and 42.8 percent higher than a year earlier. In the November 8 week, refinancing accounted for 39.9 percent of mortgage applications compared to 39.9 percent in the prior week.

Potential homebuyers appear to have accepted that mortgage rates are not going to dip again in the near future. Some of the disappointment about rates may be mitigated by more home inventory and better power to negotiate prices and terms. The recent wave of refinancing activity has ebbed. Those holders of mortgages who had an opportunity to lock in a more favorable rate on mortgages taken out when fixed rates were near or above 7 percent have done so. Or mortgage holders wanting to take out some equity for home repair, starting a business, or funding other consumer large expenses saw a chance to take out some equity while rates were relatively affordable.

The fixed-rate mortgage index is 1.0 percent higher in the November 8 week. It is 16.9 percent lower than four weeks ago and 15.7 percent higher than this week last year. The adjustable-rate mortgage index is 6.6 percent lower and is 8.0 percent lower than four weeks ago and 16.9 percent lower than a year ago.

The contract rate for a 30-year fixed-rate mortgage is 6.86 percent in the current week. This is 5 basis points higher than the prior week, 34 basis points higher than four weeks ago, and 75 basis points lower than a year earlier. The contract rate for a 5-year adjustable-rate mortgage is 6.06 percent in the week. This is 1 basis point higher than the prior week, 8 basis points lower than four weeks ago, and 59 basis points lower than a year earlier. In the November 8 week, adjustable-rate mortgages accounted for 6.5 percent of mortgage applications compared to 7.0 percent in the prior 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.