Mortgage Apps: Refis Jump

Bottom Line: Mortgage applications rebounded sharply last week, led by a big surprising jump in the refi index. Mortgage rates continued to hover around 7.50% adjusted for points paid on the average 30-year fixed rate. While the jump in the refi index was significant, we should keep in mind that small increases can cause a major jump in the index given the depressed level of applications. Overall, application volumes continue to suggest that mortgage rates are jeopardizing the recovery in housing activity.

The MBA Mortgage Application Index ROSE 5.4% to 192.0, BELOW the 13-week average of 198.0 and -27.4% BELOW the year-ago level. Non-seasonally adjusted the index ROSE 15.8%. The Purchase Index ROSE 2.3% to 147.0, BELOW the 13-week average of 153.0 and -26.5% BELOW the year-ago level. The Refinancing Index ROSE sharply, UP 13.2% to 415.0, BELOW the 13-week average of 415.0 and -29.4% BELOW the year-ago level. The effective (adjusted for points paid) 30-year mortgage rate ROSE slightly, UP 4bps to 7.52%, ABOVE the 13-week average of 7.28% and 17bps ABOVE the year-ago level. Current coupon yields in the secondary market were up 7.0 bps last week, closing at 6.07%, and were up 2.0 bps this week through Tuesday.