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Takeaway: 3Q begins with a small bounce in purchase applications but the divide between PHS and purchase apps remains extreme.

Our Hedgeye Housing Compendium table (below) aspires to present the state of the housing market in a visually-friendly format that takes about 30 seconds to consume.

*Note - to maintain cross-metric comparability, the purchase applications index shown in the table below represents the monthly average as opposed to the most recent weekly data point.

PURCHASE APPS SLIGHTLY BETTER TO START 3Q - Compendium 070914

Today's Focus: MBA Mortgage Applications

The Mortgage Bankers Association today released its weekly mortgage applications survey data for the week ended July 4. 

The data reflected a modest Increase to start 3Q with a +3.7% WoW increase in Purchase Apps and a +0.4% increase in Refi’s driving a +1.2% increase in the Composite Index

While we still aren't seeing any meaningful signs of a positive inflection in demand, moving forward, it's probable we see continued improvement from a rate of change perspective (YoY will improve even if purchase index level stays static) as comps ease through 2H.  

Here's a summary look at the data: 

Composite Index:  +1.2% sequentially and the first positive week in the last four.  

Purchase Apps:  First increase in 4 weeks with purchase demand +3.7% WoW, taking the Index back above the 180 level (181.7).  YoY improves to  -9.9% from -15.9% prior as we continue move past peak 2013 comps.

Refi:  Up +0.38% sequentially with the YoY improving to -45.9% from -48.5 prior with rates holding just above their best levels of the TTM. 

30Y Rates: Tick up +4bps WoW to 4.32% but holding near the best levels of the last year.  The latest week marks the 3rd consecutive week 30Y FRM rates are down on a YoY basis.  

PURCHASE APPS SLIGHTLY BETTER TO START 3Q - Purchase   Refi YoY   

PURCHASE APPS SLIGHTLY BETTER TO START 3Q - Purchase LT   Summary Stats 

PURCHASE APPS SLIGHTLY BETTER TO START 3Q - Purchase Index   YoY Qtrly 

 PURCHASE APPS SLIGHTLY BETTER TO START 3Q - Composite Index   YoY Qtrly

PURCHASE APPS SLIGHTLY BETTER TO START 3Q - Composite LT   Summary Stats 

PURCHASE APPS SLIGHTLY BETTER TO START 3Q - 30Y Rates

About MBA Mortgage Applications:

The Mortgage Bankers’ Association’s mortgage applications index covers more than 75% of mortgage applications originated through retail and consumer direct channels. It does not include loans delivered through wholesale broker and correspondent channels. The MBA mortgage purchase applications index is considered a leading indicator of single-family home sales and construction. Moreover, it is the only housing index that is released on a weekly basis. 

Frequency:

The MBA Purchase Apps index is released every Wednesday morning at 7 am EST.

Joshua Steiner, CFA

Christian B. Drake