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The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50% of all residential mortgage originations. It also tracks the average interest rate for 30-year and 15-year fixed-rate mortgages, as well as the volume of both purchase and refinance applications. The purchase application index has been highlighted as a particularly important data series because 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) declined notably, dropping 10 basis points to 4.43% since last week. Purchase application volume declined 2% and refinance application volume decreased 1% over the same period. Rates now appear to possibly be trending down after weeks of explosive increases that saw a rise of over 100 basis points. This is seemingly directly correlated with the Feds recent suggestion that it may start to wind down GSE purchases later this year.

However, it now appears that Chairman Bernanke's latest comments might have worked to provide a bit more clarity surrounding the Feds plans for QE, thereby working to halt the recent run-up in rates. The following charts show the average interest rates for 30-year and 15-year fixed-rate mortgages since 2006, as well as purchase, refinance, and composite loan volumes.

Source: Reading Rates: MBA Application Survey - July 24, 2013