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Takeaway: Purchase demand declined -0.7% W/W and is tracking +2.5% Q/Q. The largest retreat in rates in over a year juiced refi activity +10.6% W/W.

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.

Rate Retreat - Refi Ramps, Purchase Demand Dips - Compendium 101514

Today's Focus: MBA Mortgage Applications

MBA Mortgage Applications

The Mortgage Bankers Association today released its weekly mortgage applications survey data for the week ended October 10th. 

  • Total Mortgage Applications rose +5.6%% W/W buoyed by the +10.6% rise in refi activity alongside the largest sequential decline in rates in over a year
  • Purchase Activity declined a modest -0.7% W/W after last week’s bounce above the 170-level on the index.  4Q is currently tracking +2.5% Q/Q with the YoY improving to -4.1% in the latest week.  Comps continue to ease significantly against 4Q13 and into 1Q next year as we lap the collective shock of rising rates, QM implementation, and FHA loan limit reductions.
  • Refinance activity rose +10.6% W/W, on the back last week’s 5% rise, as rates retreated a full -10bps to 4.20%.  After dropping -13bps in the last two weeks, rates are now back at their lowest level YTD and the lowest level since June of last year.

Rate Retreat - Refi Ramps, Purchase Demand Dips - Purchase   Refi YoY

Rate Retreat - Refi Ramps, Purchase Demand Dips - Purchase Apps Qtrly    YoY

Rate Retreat - Refi Ramps, Purchase Demand Dips - Purchase Apps Qtrly Ave LT

Rate Retreat - Refi Ramps, Purchase Demand Dips - Purchase Apps LT w Summary Stats

Rate Retreat - Refi Ramps, Purchase Demand Dips - Composite Qtrly    YoY

Rate Retreat - Refi Ramps, Purchase Demand Dips - Composite LT w Summary Stats

Rate Retreat - Refi Ramps, Purchase Demand Dips - 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