On Wednesday, the Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending June 11, 2010. Their Market Composite Index, a measure of mortgage loan application volume, increased 17.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 29.7% compared with the previous week.
Their Refinance Index increased 21.1% from the previous week. It was the highest Refinance Index recorded in the survey since May 2009.
"Mortgage applications for home purchases increased last week, the first increase in over a month. Refinance applications also picked up significantly over the week," said Michael Fratantoni, MBA’s Vice President of Research and Economics.
Purchase applications dropped sharply as a result of the tax credit expiration, but with rates continuing at historic lows and the spring buying season in full swing applications are rebounding sharply.
The four week moving average for the seasonally adjusted Market Index is now up 3.8% and the average is now up 5.5% for the Refinance Index.
Wednesday, June 16, 2010
Post Stimulus: Home Buyers Now Phoning Their Bankers Again
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What is your take on some of the negative economic data that has come out over the past couple of days?
ReplyDeleteBill,
ReplyDeleteCould you be more specific on which data... note my article that I just posted which highlights, low inflation, a stronger dollar, industrial production growing, and a labor market that continues to improve...
GNE
Yes- jobless claims are stubbornly high (suggesting moderate gains for June job growth) and declines in housing starts/permits and a decline in the Philly Manufacturing index. I understand that no statistic moves in a perfect upward trend and perhaps it's just too much to ask, but the media does seem to use every such reading as a sign that growth will be too slow to reduce unemployment by much.
ReplyDeleteGood points Bill,
ReplyDeleteIndeed those three indexes did make "negative" moves this week. I agree that they deserve attention over time to determine whether or not a trend is developing.
With some of these indices it is worth following a moving average to give a better idea of the current trend. For instance, many follow the 4-week moving average for initial jobless claims. That average continues to register a decline... (of course the decline is never fast enough for anyone's taste)
Also keep in mind that the level of the Philly index still means that growth is accelerating -- just not at the same rate of acceleration as in the past. In other words the velocity continues to increase (you are still pushing faster on the accelerator) just not as quickly to the floor as you might have been.
Given the significant jump in mortgage applications, any declines in housing starts will be quite short-lived.
Thanks for your clarifications.