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 highlights mortgage purchase applications.
- Mortgage applications rose a noticeable 15.5 percent for the week ending July 15, driven by strong refinancing activity. More business flowed for mortgage bankers, but home purchase mortgage activity did not increase. The seasonally adjusted Purchase index was virtually unchanged, decreasing 0.1 percent from the previous week.
- Refinancing activity increased 23.1 percent from the prior week. Mortgage rates on a 30-year fixed mortgage decreased from 4.55 percent to 4.54 percent during the week.
- The index does not include cash purchases, which accounted for 30.0 percent in June of this year. Furthermore, the data measures applications and not approvals. So the final impact in terms of home purchase and mortgage refi approvals are not known for sure.
- For later this year, when mortgage rates are expected to be higher, the refinances will dry up, though home purchase applications can still rise if underwriting standards return to more normal levels and if the job creations pick up.
- Separately, existing-home sales for June was released and saw a slight decline. The details are here.