Purchase Apps | Equivocal ... Waiting on PHS

Takeaway: Purchase Apps declined WoW, accelerated YoY and remain in-line with the 3Q and YTD averages. We're more interested in tomorrow's PHS data.


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 | Equivocal ... Waiting on PHS - Compendium 102815


Today's Focus: MBA Mortgage Applications


The Data: Purchase Apps declined -3.1% WoW but accelerated back near the fastest pace of growth YTD at +23% YoY.


The Distortion: The TRID related pull-forward in demand and its subsequent reversal convoluted the first two weeks of October data (see 1st chart below).  The last two weeks of semi-clean data have averaged 194.3 – which compares to the 3Q average of 202 and the YTD average of 194.4. 


So the data was marginally softer sequentially, better on a year-over-year basis and largely in-line with the recent quarter and YTD trend.  Discerning a discrete inflection in trend from a single, middling print in a volatile high-frequency data set is challenging, particularly with some measure of residual distortion likely still impacting volumes.   


The Disagreement:  We’re more interested in tomorrow’s PHS data for September which we hope will serve as the arbiter of the underlying demand Trend/TRID implementation impact as the Purchase Application (up significantly) and New Home Sales (down significantly) data for September told antithetical demand stories. 


The preponderance of housing data remains strong (HPI, HMI, EHS, Purchase Apps, Interest Rates, Seasonality, Election Cycle, etc) but given the NHS decline alongside the emergent slide in consumer confidence, the recessionary data in the industrial space and twin softness in the Aug/Sept Employment reports, we’re more acutely focused on marginal shifts in the data than we have been in a while. 


Purchase Apps | Equivocal ... Waiting on PHS - Purchase YoY


Purchase Apps | Equivocal ... Waiting on PHS - Purchase YTD Monthly


Purchase Apps | Equivocal ... Waiting on PHS - Purchase Index   YoY Qtrly


Purchase Apps | Equivocal ... Waiting on PHS - Purchase 2013v14v15


Purchase Apps | Equivocal ... Waiting on PHS - Purchase   Refi YoY


Purchase Apps | Equivocal ... Waiting on PHS - Purchase LT


Purchase Apps | Equivocal ... Waiting on PHS - 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




Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more