This morning, the Mortgage Bankers’ Association released their purchase applications for last week, and the report showed that the index was down 2.5%. But, this was all from a decline in refinances, which fell 5% for the week.
However, refinances still comprise 60% of transactions, even with this decrease.
Purchase applications rose again this week, increasing by 2%. This is the best news the media won’t report. It is very encouraging to see purchases increase again, as it is real time data for August.
It supports the bounce back we were expecting from the lull we saw in July. It should also be noted that purchase applications are 6% greater than they were a year ago.
The average interest rate on 30-year conforming loans rose 12bp to 4.80%, the highest level in 2 years. This rate includes 0.41 origination points.
Pending home sales were reported down 1.3% for July, a bit worse than consensus estimates. However, we felt this number would be a bit softer due to transactions being pushed forward from July, leaving a natural void.
Pending home sales for July measures signed contracts to purchase homes during that month, so this information fully accounts for the move up in interest rates. Despite higher rates, pending home sales are still up nearly 7% from last year.