MBA Mortgage Applications 1-9-13

TRADEX GLOBAL INTERNAL COMMENTARY

Mortgage applications rebounded last week; up 11.7% from the previous week.  The refi index jumped 12.1%, while applications for new homes jumped 9.6% from the previous week.  The refinance share of all applications held steady at 82%.  Fixed 30-year mortgage rates rose 9 basis points to 3.61%, from 3.52% in the previous week.  This is the highest rate for the 30-year mortgage since November 2012.  I think our thesis of refinancings cresting and mortgage rates rising is playing out.  We are not 100% sure that Washington will not pull one more trick out of their bag to get additional mortgages refinanced, but we are very sure that we are close to the end of the “final” refinance wave.  In our Liquid Real Estate Portfolio we are going to have a full allocation to IO’s shortly, as we believe this is a compelling time to overweight this sector.  Keep nimble – Michael Beattie

EXTERNAL RESEARCH COMMENTARY

Applications for U.S. home mortgages rebounded last week after three straight weeks of declines, even as interest rates jumped, data from an industry group showed on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, surged 11.7 percent in the week ended Jan 4. The index of refinancing applications jumped 12.1 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, climbed 9.6 percent. The refinance share of total mortgage activity held steady at 82 percent of applications. Fixed 30-year mortgage rates increased 9 basis points to average 3.61 percent compared with 3.52 percent the week before. It was the highest level since early November. The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

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