Tradex Global Commentary: MBA Mortgage Applications

 

TRADEX GLOBAL INTERNAL COMMENTARY

Mortgage applications rose 18% last week, rising to the highest level since 2009.  The share of applications to refinance rose to 79%.  The weekly numbers are volatile, and this is the largest swing I can remember seeing.  We do believe that the major refinancing wave from HARP2 is past us, but the index of refinancing applications surprisingly rose 19.2% last week. I still expect that the refinancing share of mortgage applications will continue to level off, but that new home purchase applications will trend higher as we enter the warmer buying season.  30 Year Fixed Rate Mortgages averaged 3.88% last week. Mortgage applications for home purchases were up 12.8% last week.  Confidence is the key to a strong economic recovery & as I wrote this morning, confidence is currently low.  Without confidence, employers will not hire new workers, consumers will not buy many expensive widgets and the housing market will continue to languish.  This was a very positive report amongst many negative reports in the last few months. Getting consumers more affordable mortgages is very important to our economy & we will pay close attention to the housing market for signs of life. – Richard Travia

EXTERNAL RESEARCH COMMENTARY

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 18 percent in the week ended June 8. The MBA's seasonally adjusted index of refinancing applications rose 19.2 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, rose around 12.8 percent. "Refinance volume increased as borrowers were able to lock in at mortgage rates below 4 percent, and purchase application volume was its highest level in over six months," said Michael Fratantoni, MBA's vice president of research and economics, in a statement. The refinance share of total mortgage activity inched up to 79 percent of applications from 7 8 percent the week before. Fixed 30-year mortgage rates averaged 3.88 percent in the week, up a single basis point from 3.87 percent t he week before. The survey covers over 75 percent of retail residential mortgage applications, according to MBA.

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