MBA Mortgage Applications 11-28-12

TRADEX GLOBAL INTERNAL COMMENTARY

Total mortgage applications fell last week!  The total application activity dropped 0.9%.  The Index of Refinancing Applications had a bigger drop of 1.5%, but the percent of refinancing activity still held up at 81%.  The gauge of loan requests for “home purchases” rose 2.6% from the previous week.  This goes hand-in-hand with rising home prices, according to the latest Case-Shiller survey.  Mortgage rates averaged 3.53% in the last week, down 1 basis point from the prior week and closer to the historical lows.  We have been saying that we believe the refinancing wave is probably cresting and will taper off slowly in the next two quarters.  This is all good news for our Liquid Real Estate Portfolio.  Keep nimble – Michael Beattie

EXTERNAL RESEARCH COMMENTARY

Applications for U.S. home mortgages fell last week, though demand for mortgage purchases rose for a fourth straight week, 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, dropped 0.9 percent in the week ending November 23. The MBA's seasonally adjusted index of refinancing applications slipped 1.5 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, rose 2.6 percent. The refinance share of total mortgage activity was unchanged at 81 percent of applications. Fixed 30-year mortgage rates averaged 3.53 percent in the week, down 1 basis point from 3.54 percent the week before. The drop brought rates closer to historical lows in the wake of the Federal Reserve's September announcement that it would move to boost the economy through the purchase of mortgage-backed securities. The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.