Mortgage Bankers Association reports that mortgage applications rose to their highest level since May of 2010.
On Wednesday, the Mortgage Bankers Association released its weekly report on Mortgage Purchase Applications for the week ending February 1. The report disclosed that mortgage applications surged by 3.4 percent from the previous week, hitting the highest level since the first week of May, 2010. The report concerns mortgages for refinancing as well has home purchases. The database includes over 75 percent of the applications for retail residential mortgages in the United States. Too Scared to Jail: Untouchable Banks
The amount of mortgage activity for refinancing dipped to 78 percent from the previous week’s 79 percent. U.S. Launches Revenge-Attack Against S&P
From the report:
Mortgage applications increased 3.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 1, 2013. Last week’s results included an adjustment for the Martin Luther King holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 3.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 16 percent compared with the previous week. The Refinance Index increased 4 percent from the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier was at its highest level since the week ending May 7, 2010. The unadjusted Purchase Index increased 21 percent compared with the previous week and was 16 percent higher than the same week one year ago.
The refinance share of mortgage activity decreased to 78 percent of total applications from 79 percent the previous week and is the lowest refinance share observed since early July 2012. The adjustable-rate mortgage (ARM) share of activity remained constant at 4 percent of total applications.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.73 percent from 3.67 percent, with points increasing to 0.43 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The contract interest rate for 30-year fixed mortgages has increased for seven of the last eight weeks. The effective rate increased from last week.
The major ETFs expected to respond to the Mortgage Purchase Applications report are:
iShares Dow Jones US Real Estate ETF (NYSEARCA:IYR): +0.18%
Vanguard REIT ETF (NYSEARCA:VNQ): +0.35%
SPDR S&P Regional Banking ETF (NYSEARCA:KRE): 0.43%
SPDR S&P Homebuilders ETF (NYSEARCA:XHB): -0.14%
iShares Dow Jones US Financial Sector Index ETF (NYSEARCA:IYF): +0.20% Learn More About iShares ETFs
Bottom line: The latest Mortgage Purchase Applications report from the Mortgage Bankers Association surged 3.4 percent, reaching its highest level since May of 2010. Proponents of quantitative easing will obviously cite this report as further evidence of the benefits of the Fed’s liquidity pump.