Mortgage Apps: Third Week of Gains Despite Volatility

Bottom Line:  Mortgage applications rose for the third consecutive week, despite massive interest rate volatility and banking uncertainty. The 30-year mortgage rate fell sharply, dropping to an average of 6 5/8% after hitting 7% early in the month. Applications for both refinancing and purchases were higher. Overall, while the level of mortgage applications remains historically low, the modest increase in applications coincides with continued hints of stabilization in the housing market. Despite the financial market turbulence, there is still underlying demand for housing that appears likely to stabilize the residential market as it rebalances to a new equilibrium after a record move in mortgage rates last year.The MBA Mortgage Application Index ROSE 6.5% to 214.0, ABOVE the 13-week average of 214.0 but -56.8% BELOW the year-ago level. Non-seasonally adjusted the index ROSE 7.3%.
 
The Purchase Index ROSE 7.3% to 166.0, BELOW the 13-week average of 174.0 and -38.6% BELOW the year-ago level.The Refinancing Index ROSE 4.8% to 459.0, ABOVE the 13-week average of 410.0 but -74.2% BELOW the year-ago level.The effective (adjusted for points paid) 30-year mortgage rate FELL -8bps to 6.94%, ABOVE the 13-week average of 6.65% and 57bps ABOVE the year-ago level.
 
Current coupon yields in the secondary market were down -41.0 bps last week, closing at 5.03%, but were up 26.0 bps this week through Tuesday.