Mortgage Apps: Purchase Application Trend Is Key

Bottom Line: As 30-year mortgage rates hit 4.84% on average last week, mortgage applications for both purchase and refinancing fell last week. Both are firmly in short-term downtrends. Refi applications are also in a long-term downtrend, while purchase applications are technically still holding onto a long-term uptrend. With the summer selling season and volatile seasonal adjustments around summer holidays, the medium-term trend in purchase applications will be important to watch as we gauge overall housing activity -- for now the medium-term trend is still mixed. The MBA Mortgage Applications Index FELL by 2.6% during the week ended July 27 to 353.1, modestly below its 13 week average of 368.2 and 13.2% BELOW its year ago level. The Purchase Index FELL by 3.1% to 237.9, modestly below its 13 week average of 249.6 but 1.1% ABOVE its year ago level. The Refinance Index FELL by 1.7% to 971. With this decline, refinancing activity is modestly below its 13 week average of 1,008 and 28.6% BELOW its year ago level. Contract Mortgage Rates ROSE with the 30-year fixed rate increasing by 7 bps to 4.84% and with the 15-year fixed rate increasing by 6 bps to 4.29%.