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Mortgage Apps:  Refis Fall as Rates Increase; Trend Turning

October 19, 2016

Bottom Line: Mortgage activity rose slightly, led by purchase applications, but the trend continues to shift lower. Mortgage bankers reported the 30y mortgage rate rose again, reaching 3.73%, the highest rate since June. Refi applications fell for the 9th week in 13. On a trend basis the 4 week average is now down 11.5% from its peak in late July. And the 4-week average is below the 13-week average, that is now down 3.5% from its peak four weeks ago. While this morning's housing starts data wasn't enough to suggest any turn in trend, the trend in mortgage applications for both refinancing and purchases, has turned lower for now.

The MBA Mortgage Applications Index FELL by 6.0% during the week ended October 7 to 509.6, modestly below its 13 week average of 546.2 but 31.7% ABOVE its year ago level.

The Purchase Index FELL by 2.6% to 216.7, slightly below its 13 week average of 221.1 but 27.8% ABOVE its year ago level. The level of purchase activity had stayed quite low after the crisis until 2015 when it started to rise. But that trend has lost momentum since mid-2016.

The Refinance Index FELL by 8.0% to 2,190. Despite this decline, refinancing activity is moderately below its 13 week average of 2,419 but 34.2% ABOVE its year ago level.

Contract Mortgage Rates ROSE with the 30-year fixed rate increasing by 6 bps to 3.68% and with the 15-year fixed rate increasing by 4 bps to 2.97%.

Article by Contingent Macro Advisors