Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update, highlighting mortgage purchase applications, is after the jump.

  • Mortgage purchase applications fell 6.1 percent for the week ending February 25th. Purchase applications are a leading indicator of home sales.
  • However, purchase applications do not always translate into loan acceptances and transactions. Also, purchase applications do not take into consideration cash buyers who according to the January REALTORS® Confidence Index make up as much as 32 percent of transactions. In Las Vegas and Miami, the cash purchases have said to approach 50 percent.
  • Mortgage purchase applications were down 19.4 percent from the same week a year ago.
  • Consumers took advantage of a decline in mortgage rates, as they fell to 4.84 percent on a 30-year fixed mortgage. Refinances, which accounted for 64.9 percent of mortgage activity, fell 6.5 percent.
  • Private payrolls increased 217,000 in February according to the ADP report. This is a positive sign, but more official numbers come out this Friday from the Department of Labor. While the numbers differ at times, they are highly correlated as the chart below shows:

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