Mortgage Apps: Record Lows

Bottom Line:  As the average 30-year fixed-rate mortgage pushed back over 6% last week, applications for purchases and refinancings fell sharply. The refi index hit a new 15+ year low, while the purchased index hit levels last seen in 2016. Secondary mortgage market yields were higher again this week as spreads to Treasuries were back near the wides of the last few months. Overall, the trend in mortgage applications suggests that the slowdown in housing continued through August. It appears that purchase application volume will fall towards levels seen in 2015, possibly hitting record lows later this year.

The MBA Mortgage Application Index FELL -3.7% to 260.0, BELOW the 13-week average of 290.0 and -63.8% BELOW the year-ago level. Non-seasonally adjusted the index FELL -5.3%.
 
The Purchase Index FELL -1.8% to 199.0, BELOW the 13-week average of 216.0, and -23.1% BELOW the year-ago level. The Refinancing Index FELL -7.8% to 562.0, BELOW the 13-week average of 664.0 and -83.4% BELOW the year-ago level. The effective (adjusted for points paid) 30-year mortgage rate ROSE sharply, UP 16bps to 6.01%, ABOVE the 13-week average of 5.86% and 92bps ABOVE the year-ago level. Current coupon yields in the secondary market were up 13.0 bps last week, closing at 4.49%, and were up 8.0 bps this week through Tuesday.