The weekly Mortgage Bankers Association purchase applications numbers are out. It deals with how many mortgage applications have been filed over a particular week. Hedgeye Financials Sector Head Josh Steiner took note that this week’s print of up 13% was “extremely” strong.
Memorial Day seems to be the catalyst here. The week of Memorial Day is traditionally weak with a negative print, followed by a positive jump in applications the following week. That’s averaged about +6.4% week over week from 2008-2011. This +13% number shows that mortgage application volume is going strong and will continue to do so as we head further into June.
The trade here is to be wary of shorting housing. Steiner thinks that shorting housing into the June 27th report for May pending home sales is not the way to go. Looking at the chart above, it’s apparent that something positive is in the works.