Mortgage Purchase And Refinancing Applications Rise

Purchase applications for home mortgages rose a seasonally adjusted 2 percent in the October 19 week, rebounding after falling sharply in the previous week on the back of a jump in interest rates. Despite the weekly increase, the year-on-year gain in purchase applications shrank by 1.8 percentage points to 0.2 percent. Applications for refinancing increased 10 percent from the prior week, with the refinancing share of mortgage activity rising to 39.8 percent. The average interest rate on 30-year fixed rate conforming mortgages ($453,100 or less) rose 1 basis point from the prior week to 5.11 percent, the highest level since February 2011. Held back by mortgage rates nearly a percentage point (93 basis points) higher than they were a year ago and tight inventory, purchase applications may be on the brink of turning negative year-on-year again (as they were in August), which does not bode well for a housing market showing signs of increasing weakness. The releases of the FHFA House Price Index for August and New Home Sales data for September later this morning will shed further light on the nation's housing market.