Purchase Apps | Holiday Noise

Takeaway: Q3 Housing data is off to an ambiguous start thanks to Holiday volatility. We'll have a better sense for how things are trending next week.

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.


Purchase Apps | Holiday Noise - Compendium 071515


Today’s Focus:  MBA Mortgage Applications

Data volatility is notoriously prevalent around holidays and seasonal adjustments are notoriously poor at fully resolving the peri-holiday choppiness in activity.  Superficially, the last two weeks of Purchase Application data appear to support that notoriety. 


After rising +6.6% in the week ending July 3rd, Purchase Demand in the latest week declined -7.5%.   We’re inclined to simply call it a wash and wait for next weeks data before attempting to discern any underlying shift in demand to start 3Q. 


The Data:  Purchase activity declined -7.5% in the latest week, taking the index back below the 200-level to 196.4.  From a rate-of-change perspective, however, the data was more sanguine as growth actually accelerated +10bps sequentially to +17.0% YoY.  Refinance activity, meanwhile, rose +3.7% with rates on the 30Y FRM contract steady for a second week at 4.23%.   Rates remain -2.3% lower than the corresponding period last year with the current rate of 4.23% comparing to the full year average of 4.35% and the 1H15 average of 3.97%. 


In short, the high-frequency Purchase Demand data remains good on an absolute basis and very good on a rate of change basis but the holiday convolutes a clean reading of the trend to start 3Q.  Hurry Up and wait.  



Purchase Apps | Holiday Noise - Purchase   Refi YoY  


Purchase Apps | Holiday Noise - Purchase Applications LT 


Purchase Apps | Holiday Noise - Purchase 2013v14v15 


Purchase Apps | Holiday Noise - Purchase Index   YoY Qtrly 


Purchase Apps | Holiday Noise - Purchase YoY  


Purchase Apps | Holiday Noise - 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. 



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



Joshua Steiner, CFA


Christian B. Drake


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

read more

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more