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
Today's Focus: MBA Mortgage Applications
The Mortgage Bankers Association today released its weekly mortgage applications survey data for the week ended September 5th.
The Composite Index hit a new 10Y low in the holiday week, declining -7.2% sequentially with Refinance and Purchase demand sliding -10.6% and -2.6% WoW, respectively. As this morning's data is reflecting a holiday week, we'll hold our breath for next week's print for confirmation, but, regardless, the intermediate-term trend remains down.
- From August Anemia to September Slowdown: The purchase Index fell for the 5th time in 6 weeks, declining -2.6% WoW to 161.5 on the Index. This marks the 9th consecutive week at the 160-level and the softest demand streak since April of 1995 – note that outside of 1 week during the peak weather distortion in February (155 on 2/21/14), the Purchase index hasn’t fallen below the 160-level since 3Q11. Purchase demand remains down -12% YoY and is currently tracking -6.4% QoQ.
- Refi & Rates: Refinance activity fell -10.6% WoW with the holiday and the sequential rise in rates both playing negatively. Rates on the 30Y FRM contract increased for the 1st time in a month, rising +2bps sequentially to 4.27%. Refi activity remains down -17.2% YoY but the rate of change continues to improve as we move through the easiest 2013 comps.
As we’ve been apt to highlight of late, while the MBA survey states that it covers 75% of all US retail residential mortgage applications, it does not count applications submitted through the broker/correspondent/wholesale channels. Given the regulation catalyzed share-shift in the mortgage origination channel, it’s likely the MBA survey is modestly understating current demand.
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.
The MBA Purchase Apps index is released every Wednesday morning at 7 am EST.
Joshua Steiner, CFA
Christian B. Drake