The countdown is ticking away to the release of the Federal Reserve Open Market Committee (FOMC) meeting minutes this afternoon. While many investors are collectively holding their breath, it is very unlikely that there will be any drastic changes to the Fed's current course of action (or inaction, rather). So far, the major equity indices seem unfazed by the impeding news; the NASDAQ even reached another new 14-year high and the S&P 500 is less than 20 points away from breaking back above 2,000. The major release of the day, once again, had to do with home buying as the Mortgage Bankers' Association (MBA) released their weekly readings.
In the last week, an ample drop in mortgage rates was the reason why MBA purchase applications fell 0.4%. The trend in purchase applications is relatively weak year-over-year with the index down 11% over the same period last year. Monday's housing market report cited a rise in serious buyers for new homes, but based on mortgage application data, it's more likely that these buyers are paying primarily in cash. Applications for conventional mortgages (purchases and refinancing) both increased during the week but the report notes a 5.9% decline in applications for government mortgages, which includes an unadjusted 8% decline in Department-of-Veterans-Affairs applications. Housing applications through the Federal Housing Administration and Rural Housing Service also declined last week. In terms of refinancing applications, there was a 3.0% increase during the week which lifted the refinancing index a lift to 1.4%. Overall, refinancing makes up about 55% of all mortgage applications; slightly higher from the 54% in the previous week. Mortgage rates moved lower again for conforming loans, dropping to levels seen earlier in the summer.