Mortgage Apps: Correlation with Mortgage Rates Increases
December 12, 2018
Bottom Line: Looking through the volatility around the US Thanksgiving holiday purchase activity has picked up slightly with the drop in mortgage rates. 30-year fixed-rates have fallen back below 5%, a drop of about 25bps from the recent high, according to the survey of realtors. The trend is still down but bears watching as the correlation between mortgage rates and purchase activity has increased markedly since mortgage rates went over 4.5% earlier this year. The MBA Mortgage Applications Index ROSE by 1.6% during the week ended December 7 to 346.0, modestly above its 13 week average of 335.7 but 13.2% BELOW its year ago level. The Purchase Index ROSE by 2.5% to 256.1, moderately above its 13 week average of 235.3 and 3.3% ABOVE its year ago level. The Refinance Index ROSE by 1.8% to 852. Despite this increase, refinancing activity is modestly below its 13 week average of 871 and 33.5% BELOW its year ago level. Contract Mortgage Rates FELL with the 30-year fixed rate declining by 12 bps to 4.96% and with the 15-year fixed rate declining by 9 bps to 4.41%.
Article by Contingent Macro Advisors