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MBA Survey: Rates Decline Modestly, Mortgage Applications Increase Sharply

July 6, 2016
Bottom Line: Mortgage activity rose sharply in the latest week. The 30-year mortgage rate was below 4% for the 23rd consecutive week. Home buying increased modestly while refinancing activity rose sharply. On a trend basis mortgage applications are improving, especially when looking at 13-week averages for this volatile series.

The MBA Mortgage Applications Index ROSE by 14.2% during the week ended July 1 to 580.8, sharply above its 13 week average of 509.9 and 51.4% ABOVE its year ago level. On a longer term basis, mortgage applications rose from early 2011 until May 2013 when the trend topped out and retreated until December 2014 -- but it turned sharply higher in early 2015 and after some volatility has been trending higher.

The Purchase Index ROSE by 4.3% to 234.6, slightly above its 13 week average of 234.6 and 10.5% ABOVE its year ago level. The level of purchase activity had stayed quite low, amid modest volatility but has started to turn moderately higher since 2015.

The Refinance Index ROSE by 20.8% to 2,580. With this increase, refinancing activity is sharply above its 13 week average of 2,096 and 92.1% ABOVE its year ago level.

Contract Mortgage Rates FELL with the 30-year fixed rate declining by 9 bps to 3.66% and with the 15-year fixed rate dipping by 6 bps to 2.96%.
Article by contingentmacro