The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as application volume for both purchase and refinance applications.The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.
The latest data is showing that the average rate for a 30 year fixed rate mortgage decreased measurably since last week to 5.82% while the purchase volume increased a whopping 15.2% and the refinance volume surged 31.9% compared to last weeks results.
Keep in mind, these outsized increases come on the back of a revision to last week’s numbers that were reported to include an error due to the shortened Thanksgiving week.
As seasonally adjusting data is generally more difficult this time of the year, this type of revision should be considered fairly normal.
I’ll update this post later to capture some additional historical data so that these latest results can be put in better perspective.
It’s important to note that the data is reported (and charted) weekly and that the rate data represents average interest rates, and the index data represents mortgage loan application volume for home purchases, home refinances and a composite of all loans.
The following chart shows how the principle and interest cost and estimated annual income required to cover the PITI (using the 29% “rule of thumb”) on a $400,000 loan has changed since January 2007.
The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages over the last number of weeks (click for larger version).
The following charts show the Purchase Index, Refinance Index and Market Composite Index since January 2007 (click for larger versions).
