MBA Mortgage Applications; Week of September 21

TRADEX GLOBAL INTERNAL COMMENTARY

Mortgage applications dropped last week by a small amount, -0.2% in total.  The story here is that applications for new homes dropped 3.8% from the prior week, but refinance activity rose by 0.80% and accounted for 81% of all applications.  The fixed 30-year mortgage rate was down 3 basis points to 3.72%.  We are carefully watching the rate of prepays (refinancing) and how that will affect our IO’s (interest only securities).  We still believe that the rate of refi’s is peaking and most borrowers who could refi have done so or are in the process.  Keep nimble – Michael Beattie

EXTERNAL RESEARCH COMMENTARY

Applications for home mortgages dipped last week, though demand for refinancings rose as mortgage rates fell to a record low, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, edged down 0.2 percent in the week ended Sept 14. The seasonally adjusted index of refinancing applications gained 0.80 percent. The gauge of loan requests for home purchases, a leading indicator of home sales, tumbled 3.8 percent. The refinance share of total mortgage activity rose to 81 percent of applications from 80 percent the week before. Fixed 30-year mortgage rates fell 3 basis points to average 3.72 percent, the lowest rate in the history of the survey. The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

Tradex Global Advisory Services, LLC

investorrelations@thetradexgroup.com 

203-863-1500

@Tradex_Global