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 (from FHA and conforming GSE data) decreased 5 basis points to 3.77% since last week while the purchase application volume declined 3% and the refinance application volume jumped 22% over the same period.
In the last two weeks, there has been a notable 16 basis point decline in interest rates stimulating a whopping 88% jump in refinance applications and 21% jump in purchase applications and rates appear to be headed even lower.
The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).
