Mortgage Apps: Higher As Rates Hold Below 7%

Bottom Line: Mortgage activity rose modestly again last week as mortgage rates held below 7% on the average 30-year fixed-rate and housing activity continued to show signs of bottoming. Applications for purchases and refinancings rose. Secondary mortgage spreads to Treasuries widened slightly but remained much less volatile than earlier in the year. The current coupon continued to hover around 5.5%, leaving room for primary mortgage rates to edge lower still if volatility remains muted. Overall, the mortgage market remains highly sensitive to rates, and as long as the primary mortgage rate holds below 7%, activity should continue to bottom.The MBA Mortgage Application Index ROSE 3.0% to 216.0, ABOVE the 13-week average of 212.0 but -33.0% BELOW the year-ago level. Non-seasonally adjusted the index FELL -8.0%. The Purchase Index ROSE 2.8% to 170.0, ABOVE the 13-week average of 165.0 but -29.9% BELOW the year-ago level. The Refinancing Index ROSE 3.3% to 439.0, BELOW the 13-week average of 451.0 and -39.5% BELOW the year-ago level. The effective (adjusted for points paid) 30-year mortgage rate ROSE slightly, UP 2bps to 6.94%, ABOVE the 13-week average of 6.79% and 15bps ABOVE the year-ago level. Current coupon yields in the secondary market were up 5.0 bps last week , closing at 5.47%, and were up 4.0 bps this week through Tuesday.