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Takeaway: The MBA Purchase Applications Index sits at 170 3QTD, down -4.8% QoQ and the lowest quarterly reading since 3Q 1995

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.

VANISHING 3Q14 PURCHASE VOLUME - Compendium 080614

Today's Focus: MBA Mortgage Applications

The Mortgage Bankers Association today released its weekly mortgage applications survey data for the week ended August 1st.


The Composite index rose +1.6% WoW.  However, refi activity was the singular source of strength (+3.8% WoW) as Purchase demand slide -1.3% sequentially.

  • Vanishing Purchase Volume:  The Purchase Index printed at 166.5, its fourth straight week at the 160-level.  For context, on a rolling 4-wk average basis, demand is sitting just above the peak weather distortion lows observed in February while average purchase demand for 3Q to-date is currently tracking at its lowest level since 1995.  In short, housing demand as captured by the MBA series – which purports to cover 75% of total application volume – is off to a discretely inauspicious start for 3Q.  
  • Refi & Rates:  Refinance activity increase +3.8% WoW despite rates on the 30Y FRM contract ticking up to 4.35% -  the first increase in 3 weeks.  Refi activity remains down -39% YoY and continues to improve as we traverse through the easiest 2013 comps. 

Summarily, the high frequency housing data continues to corroborate the sea of red currently blanketing our housing compendium.  As we’ve highlighted repeatedly, we’re inclined to remain bearish on the housing complex until the slope of HPI deceleration inflects.

VANISHING 3Q14 PURCHASE VOLUME - Purchase Index Qtrly Ave

VANISHING 3Q14 PURCHASE VOLUME - Purchase Index 4Wk Ave

VANISHING 3Q14 PURCHASE VOLUME - Purhcase   Refi YoY

VANISHING 3Q14 PURCHASE VOLUME - Purchase Apps LT w summary stats

VANISHING 3Q14 PURCHASE VOLUME - Composite LT w summary stats

VANISHING 3Q14 PURCHASE VOLUME - 30Y FRM

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