TRADEX GLOBAL INTERNAL COMMENTARY
Mortgage applications fell last week, but “new purchases”
rose to the highest levels since June. Mortgage
refinancing applications fell 2%, while applications for home purchases rose
2.4%. Despite the decline in
refinancing, we believe that the level of prepayments will stay elevated for
another quarter and will taper off near year end. 30-year mortgage rates were at 3.56%,
slightly higher than 3.53% the week before.
The MBA survey covers 75% of US residential mortgage applications. I think that this report has some noise to
it, but it is a slight positive that “new home” purchase applications is rising. Keep nimble – Michael Beattie
EXTERNAL RESEARCH COMMENTARY
Applications for home mortgages fell last week as demand for
refinancing eased slightly but purchase applications rose to their highest
levels since June, 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, fell 1.2
percent in the week ended on October 5, 2012. The MBA's seasonally adjusted
index of refinancing applications fell 2 percent, while the gauge of loan
requests for home purchases, a leading indicator of home sales, rose 2.4
percent. Despite the decline of refinance applications, their volume is still
near three-year highs, Mike Fratantoni, MBA's vice president of research and
economics, said in a statement. Fixed 30-year mortgage rates averaged 3.56
percent in the week, up 3 basis points from 3.53 percent the week before.
Still, they remained near their lowest levels in the wake of the Federal
Reserve's latest aggressive program to boost the economy. In a program known as
quantitative easing, or QE3, the Fed said in September that it will buy $40
billion in mortgage-backed securities a month until the job market improves.
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
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