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PURCHASE MORTGAGE APPLICATIONS
|
Statistic |
| MOST
RECENT STATISTIC: |
173.6 |
| GRADE: |
F |
| PERIOD
COVERED: week ending |
08/27/10 |
| Date
Released: |
09/01/10 |
| Next
Release: |
09/08/10 |
| p-Preliminary |
|
Analysis for the Housing Market
By:Ken Lee
In the week ending August 27th, the MBA’s seasonally-adjusted purchase index increased 1.82% from the previous week but was still down 37.46% compared to the same time last year. This is the second straight week that the purchase index has increased. The purchase index has also recorded weekly gains in six out of the past seven weeks. However, the index still remains near its lowest levels in almost 14 years.
The Market Composite Index, which is a measure of mortgage loan application volume, increased 2.7% on a seasonally-adjusted basis from the previous week. Moderate gains in both refinance and purchase activity helped push overall mortgage application volume higher last week.
The refinance share of mortgage activity increased to 82.9% from 82.4% in the previous week. The ARM share of mortgage activity increased to 6.1% this week from 5.8% in the previous week.
Definitions and Importance for the
Housing Market
By:Ken Lee
A purchase mortgage application occurs when a potential purchaser (buyer) submits an application to qualify for a mortgage. Purchase mortgages are tracked separately from refinance mortgages (the issuance of new debt to replace old debt).
Information for mortgage applications is obtained from a survey conducted by the Mortgage Bankers Association, which covers approximately 40 percent of all U.S. retail residential mortgage originations. The survey has been conducted weekly since 1990 and is considered to be highly reliable due to the significant survey sample size. Respondents include mortgage bankers, commercial banks and thrifts. The Mortgage Bankers Association (MBA) uses an index to measure, in constant terms, any fluctuations in the number of mortgage applications issued during a given period. The base period for all indexes is March 16, 1990=100.
Because a mortgage application occurs very early in the home buying cycle, this indicator is a very good predictor of short-term sales. Because it is a weekly survey, and there is little lag time, this indicator is very useful for businesses in the home buying industry. It is important, however, not to overreact to one bad week.
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