Mortgage Applications fell by 14% in the current week
The good news is the purchase index rose by 1%. The bad news was in the refinancing index which fell by 19% due to higher rates. The average rate on the 30 year fixed mortgage rose 4.81%, the highest level in 2 months. Last week the rate was 4.69 and the rate reached a low of 4.61%.
This index is the most timely mortgage/housing data available to the market and reflects data from approxiamately half of the US retail mortgage industry. As such it can give a good gauge of the housing and refinancing demand.
Later at 10:00 AM the Existing Home Sales for April will be released. The expectation is for the sales pace to increase to 4.66 M annualized pace from 4.57 M last month. The months supply will also be of interest to the market. This measure shows the amount of supply in months of homes on the market given the current sales pace. For example, if the annual sales pace increases while the total supply remains constant or declines, the months supply would decrease.
If the sales pace does indeed rise this month to 4.66 M annualized pace, the month supply should fall all things being equal. The unknown is the supply of new homes that come on the market. Foreclosed homes on the market have continued to increase adding to that supply. This continues to dominate the housing market as those looking to buy are looking for the foreclosed homes which come at a discout.
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