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Mortgage Apps: Steady Trends, Higher Secondary Spreads

December 8, 2021
Bottom Line:  As the effective mortgage rate held over 3 3/8% in the week during and after the Thanksgiving holiday, trends in mortgage applications were little changed, despite complex seasonal adjustments. While refi activity has fallen sharply, housing activity remains robust, with purchase activity trending higher again after a slow summer. Secondary mortgage market spreads remained wide, keeping the primary mortgage rate elevated even as the 10-year Treasury yield declined. Trading in about a 5bps range near the wides of the last month, the current coupon mortgage spread to a blend of Treasuries bears watching as we advance. 
The MBA Mortgage Application Index ROSE 2.0% to 616.0, BELOW the 13-week average of 664.0 and -27.3% BELOW the year-ago level. Non-seasonally adjusted the index ROSE sharply , UP 44.6%.
The Purchase Index FELL -5.0% to 295.0, ABOVE the 13-week average of 283.0 but -9.4% BELOW the year-ago level.
The Refinancing Index ROSE sharply , UP 9.0% to 2512.0, BELOW the 13-week average of 2867.0 and -36.6% BELOW the year-ago level.
The effective (adjusted for points paid) 30-year mortgage rate FELL -2bps to 3.41%, ABOVE the 13-week average of 3.29% and 14bps ABOVE the year-ago level.