Mortgage Apps: Refis Jump As 30-year Mortgage Rates Fall Below 4%
August 14, 2019
Bottom Line: Applications rose sharply last week driven by a spike higher in refinancing as the average 30-year mortgage rate fell below 4%. The refi index hit its highest level in nearly three years with applications for refis accounting for 61% of applications, well above the 13-week average of 49% and 38% a year ago. On a trend basis the refi index has been trending higher since the 1st Quarter, recently accelerating sharply . Purchase activity had been on a slow uptrend, but that trend has now lost momentum after increasing earlier this year . Overall, it appears that refinancing activity will drive marginal mortgage activity in the coming months, while purchase activity suggests that the rebound in housing sales might be topping out for now. The MBA Mortgage Applications Index ROSE by 21.7% during the week ended August 9 to 620.4, sharply above its 13 week average of 495.7 and 84.8% ABOVE its year ago level. The Purchase Index ROSE by 1.9% to 252.6, modestly below its 13 week average of 262.5 but 12.0% ABOVE its year ago level. The Refinance Index ROSE by 36.9% to 2,743. Despite this increase, refinancing activity is sharply above its 13 week average of 1,815 and 195.7% ABOVE its year ago level. Contract Mortgage Rates FELL with the 30-year fixed rate declining by 8 bps to 3.93% and with the 15-year fixed rate declining by 9 bps to 3.28%.
Article by Contingent Macro Advisors