| Actual | Previous | |
|---|---|---|
| Composite Index - W/W | 29.7% | 9.2% |
| Purchase Index - W/W | 2.9% | 6.6% |
| Refinance Index - W/W | 24.4% | 12.2% |
Highlights
In the September 12 week, overall mortgage applications jump significantly. However, much of that is due to a big wave of refinancing. Many of those who have current mortgages with higher rates moved to bring down their monthly payment, and many of those new loans were in adjustable-rate mortgages which would result in even greater reductions in monthly mortgage payments. Applications for loans for new mortgages rose only slightly as potential homebuyers remain hesitant to commit to purchasing while economic uncertainty is high and worries about job security are elevated. The MBA report notes that the level of ARMs is the highest since 2008. MBA Chief Economist Mike Fratantoni said, Homeowners with larger loans jumped first, as the average loan size on refinances reached its highest
level in the 35-year history of our survey. Almost 60 percent of applications were for refinances, but there was also a pickup in purchase applications.
The MBA mortgage applications index is 29.7 percent higher in the September 12 week. It is 39.3 percent higher than four weeks ago and 44.7 percent higher than a year earlier. The purchase index is 2.9 percent higher in the current week and 8.5 percent higher than four weeks ago and 19.1 percent higher than a year earlier. The refinancing index is 57.7 percent higher and is 72.4 percent higher than four weeks ago and 69.6 percent higher than a year earlier. In the September 12 week, refinancing accounted for 59.8 percent of mortgage applications compared to 48.8 percent in the prior week.
The fixed-rate mortgage index is 24.4 percent higher in the September 12 week. It is 32.8 percent higher than four weeks ago and 33.9 percent higher than this week last year. The adjustable-rate mortgage index is 81.2 percent higher and is 108.4 percent higher than four weeks ago and 218.5 percent higher than a year ago.
The contract rate for a 30-year fixed-rate mortgage is 6.39 percent in the current week. This is 10 basis points lower than the prior week, 29 basis points lower than four weeks ago, and 24 basis points higher than a year earlier. The contract rate for a 5-year adjustable-rate mortgage is 5.65 percent in the week. This is 12 basis points lower than the prior week, 36 basis points lower than four weeks ago, and 1 basis points lower than a year earlier. In the September 12 week, adjustable-rate mortgages accounted for 12.9 percent of mortgage applications compared to 9.2 percent in the prior week.
level in the 35-year history of our survey. Almost 60 percent of applications were for refinances, but there was also a pickup in purchase applications.
The MBA mortgage applications index is 29.7 percent higher in the September 12 week. It is 39.3 percent higher than four weeks ago and 44.7 percent higher than a year earlier. The purchase index is 2.9 percent higher in the current week and 8.5 percent higher than four weeks ago and 19.1 percent higher than a year earlier. The refinancing index is 57.7 percent higher and is 72.4 percent higher than four weeks ago and 69.6 percent higher than a year earlier. In the September 12 week, refinancing accounted for 59.8 percent of mortgage applications compared to 48.8 percent in the prior week.
The fixed-rate mortgage index is 24.4 percent higher in the September 12 week. It is 32.8 percent higher than four weeks ago and 33.9 percent higher than this week last year. The adjustable-rate mortgage index is 81.2 percent higher and is 108.4 percent higher than four weeks ago and 218.5 percent higher than a year ago.
The contract rate for a 30-year fixed-rate mortgage is 6.39 percent in the current week. This is 10 basis points lower than the prior week, 29 basis points lower than four weeks ago, and 24 basis points higher than a year earlier. The contract rate for a 5-year adjustable-rate mortgage is 5.65 percent in the week. This is 12 basis points lower than the prior week, 36 basis points lower than four weeks ago, and 1 basis points lower than a year earlier. In the September 12 week, adjustable-rate mortgages accounted for 12.9 percent of mortgage applications compared to 9.2 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.
