Mortgage Apps: Rate Sensitive Apps Suggest Stabilization in Housing
March 20, 2019
Bottom Line: Mortgage applications have continued to stabilize and even trend slightly higher. Initially rebounding sharply in early '19, then correcting for a few weeks, the trend is now towards modest improvement after a deceleration throughout much of 2018. In the latest week 30-year fixed-rate mortgages averaged 4.55%, 50+bps below the peak seen in 4Q18. The correlation between rates and application activity has proven to be discontinuous with a clear drop in activity as rates pushed towards 5% and higher and a resumption in activity below 4.75%. For now it appears that mortgage application activity (and in turn housing activity) should continue to improve modestly as long as mortgage rates stay below 4.75%. The MBA Mortgage Applications Index ROSE by 1.6% during the week ended March 15 to 390.0, modestly above its 13 week average of 370.0 and 1.8% ABOVE its year ago level. The Purchase Index ROSE by 0.3% to 251.5, slightly above its 13 week average of 248.7 and 0.6% ABOVE its year ago level. The Refinance Index ROSE by 3.5% to 1,147. Despite this increase, refinancing activity is sharply above its 13 week average of 1,042 and 3.5% ABOVE its year ago level. Contract Mortgage Rates FELL with the 30-year fixed rate declining by 9 bps to 4.55% and with the 15-year fixed rate declining by 5 bps to 3.97%.
Article by Contingent Macro Advisors