This week’s mortgage application data was a stunner. This data, released by the Mortgage Bankers’ Association, showed that applications dropped by a whopping 13.5% last week. Most of the decline was from a decrease in refinances, which dropped an eye popping 20% over the week.
This is one of the largest weekly declines we can remember. The Purchase Application Index, which was up nicely for the month of August, declined by 3%. While this is a modest decline, our antenna is up to see if this is a normal fluctuation or an early indication of weakness in housing.
Refinances now make up 57% of all transactions, which is the lowest level since 2009.
Initial jobless claims were released at the lowest level since 2006. Claims were reported below 300,000, at 292,000. This was much better than expectations of 330,000, and represents a drop of 31,000 from last week’s unrevised figure.
However, a great deal of the improvement in claims is due to two states who failed to report data because of computer system upgrades. As a result of this, a lot of the enthusiasm of this report needs to be tempered.
But, if we can assume that claims remained where they were last week, they have been in the 330,000 range or better over the last 8 reports, this would show consistency and an improving economy.