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Mortgage Apps: Modest Increase

May 10, 2017

Bottom Line: The first week of May saw an increase in mortgage applications for both purchases and refinancings. On a trend basis, applications for refinancing remain near record lows. And these data do not include the increase in market rates seen at the end of last week and throughout this week. Proving much less rate-sensitive, purchase applications are rising steadily. Overall, the purchase applications suggest continued strength in housing activity, while the refinance application suggests prepayments due to refinancing of existing mortgages should remain low.

The MBA Mortgage Applications Index ROSE by 2.4% during the week ended May 5 to 415.7, modestly above its 13 week average of 400.1 but 15.2% BELOW its year ago level.

The Purchase Index ROSE by 1.7% to 250.3, modestly above its 13 week average of 236.7 and 6.2% ABOVE its year ago level. The level of purchase activity had stayed quite low after the crisis until 2015 when it started to rise. That trend lost momentum in mid-2016 but has now started to rise again, despite higher mortgage rates.

The Refinance Index ROSE by 3.3% to 1,346. Despite this increase, refinancing activity is modestly above its 13 week average of 1,312 but 31.5% BELOW its year ago level.

Contract Mortgage Rates were MIXED with the 30-year fixed rate was unchanged at 4.23% and with the 15-year fixed rate declining by 1 bp to 3.50%.

Article by Contingent Macro Advisors