The MBA mortgage applications index fell -1.9% in the week of September 3, following last week’s -2.4% drop, though the index remains well above the 18-month low from the first week of July. Today’s drop mostly reflects a -2.8% decline in the refi index, following last week’s -3.8% drop, as we further unwind the 6-month high at the start of August attributable to a mortgage rate decline.
We saw a -0.2% down-tick in the purchase index, following last week’s 0.6% gain, leaving the index still well above its 15-month low at the end of July. Improvement for the MBA purchase data since the late-July bottom tracks the notion that the SA data will behave counter-seasonally in 2021 as in 2020, as capacity constraints apply less pressure to SA data outside of the peak season. We’re similarly seeing a stabilization for new and existing home sales into Q3 after the Q2 pull-back from elevated winter levels.
- The MBA mortgage applications index fell -1.9% in the week ending September 3 after a -2.4% drop, versus an 18-month low at the start of July.
- The MBA purchase index slipped -0.2% after a 0.6% rise to a 7-week high, versus a 15-month low at the end of July.
- The MBA refi index fell -2.8% after a -3.8% drop, versus a 5-month high at the start of August and a 17-month low at the start of July.
The 30-year mortgage rate remained at 3.03% for a third week. We saw two sub-3% rates into early-August that were the lowest since February 5, which was the tail end of a 3-month stint with a 2-handle. We saw a 3.36% 2021 peak in both March and April, following an all-time low of 2.85% on December 11, 2020.
The purchase index is entering September 1.5% above the August average, leaving the potential first gain since March, following declines of -0.8% in August, -2.4% in July, -2.0% in June, -5.1% in May, and -4.5% in April. The purchase index has trended downward from its 12-year high in mid-January.
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The MBA headline and purchase indexes have underperformed in 2021, given headwinds from elevated prices for building materials, shortages of labor and land, and a general rise in mortgage rates. We’ve seen surprising restraint in all the housing sector data since April, despite enormous price gains and a historic shortage of home inventory. If you are looking to buy a house, now would be a good time because the market may dip soon. Areas like Huntsville in Texas that haven’t seen the huge increases may also be a good value.