Mortgage Apps: Increase Barely Registers

Bottom Line:  A nearly 3% increase in mortgage applications last week was barely noticeable as the overall level of applications remained near historic lows. The average 30-year mortgage rate available to borrowers fell for the second week, dropping back below 7%, as secondary mortgages saw the third week of tighter spreads to Treasuries and lower volatility. Overall, we see some rate-driven impulse for mortgage applications, but the level of applications remains very low and unlikely to rebound sharply until a sustained rally takes the average mortgage rate back near 5%, nearly 200 basis points away.The MBA Mortgage Application Index ROSE 2.2% to 210.0, BELOW the 13-week average of 227.0 and -67.8% BELOW the year-ago level. Non-seasonally adjusted the index ROSE 10.0%.
 
The Purchase Index ROSE 2.8% to 174.0, BELOW the 13-week average of 179.0 and -41.0% BELOW the year-ago level.
 
The Refinancing Index ROSE slightly, UP 1.8% to 374.0, BELOW the 13-week average of 454.0 and -86.2% BELOW the year-ago level.
 
The effective (adjusted for points paid) 30-year mortgage rate FELL -19bps to 6.87%, ABOVE the 13-week average of 6.85% and 105bps ABOVE the year-ago level.
 
Current coupon yields in the secondary market were up 3.0 bps last week, closing at 5.32%, and were down -3.0 bps this week through Tuesday.