Mortgage Apps: Yet Another Sharp Drop, Record Low for Purchases

Bottom Line:  Mortgage applications fell again last week as the average 30-year fixed rate rose to nearly 7%, up from 6 3/8% in late January on the average 30-year fixed rate. Purchase applications hit a new low as applications for refinancing approached their recent lows. Despite most homeowners enjoying fixed rates below 4%, the mortgage market remains remarkably sensitive to moves in mortgage rates.  Before the sudden rebound in mortgage rates, applications appeared to be finding a bottom. But that is now in question and bears close watching as mortgage rate and spread volatility have started to increase again. On the plus side, current coupon yields were a touch lower in the first few days of trading this week, and spreads to Treasuries have started to stabilize after significant widening.The MBA Mortgage Application Index FELL -5.7% to 188.0, BELOW the 13-week average of 215.0 and -59.3% BELOW the year-ago level. Non-seasonally adjusted the index FELL slightly , DOWN -3.6%.
 
The Purchase Index FELL -5.6% to 139.0, BELOW the 13-week average of 176.0 and -43.6% BELOW the year-ago level.
 
The Refinancing Index FELL -5.5% to 444.0, ABOVE the 13-week average of 414.0 but -73.7% BELOW the year-ago level.
 
The effective (adjusted for points paid) 30-year mortgage rate ROSE 9bps to 6.93%, ABOVE the 13-week average of 6.59% and 62bps ABOVE the year-ago level.
 
Current coupon yields in the secondary market were up 20.0 bps last week , closing at 5.58%, and were down -6.0 bps this week through Tuesday.