Reading Rates: MBA Application Survey - Sept. 11, 2013

 |  Includes: ITB, IYR, KME, REZ, XHB
by: Sold At The Top

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 as it very broadly captures the demand side of residential real estate for both new- and existing-home purchases.

The latest data shows that the average rate for a 30-year fixed-rate mortgage (from FHA and conforming GSE data) increased 7 basis points, to 4.68%, since last week. The purchase application volume declined 3% and the refinance application volume declined 20% over the same period. Rates appear to be continuing to rise after some settling following weeks of explosive increases that saw a rise of over 100 basis points, seemingly directly correlated with the Fed's recent suggestion that it may start to taper the GSE and treasury purchases later this year. The following charts show the average interest rate for 30-year and 15-year fixed-rate mortgages since 2006, as well as purchase, refinance, and composite loan volumes.