Reading Rates: MBA Application Survey – April 11 2012

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) declined 4 basis points to 3.98% since last week while the purchase application volume declined 0.5% and the refinance application slumped 3.1% over the same period.

With rates jumping in recent weeks and housing activity remaining largely weak, it will be interesting to see if concern over housing leads the doves on the FOMC to further promote QE3 in an effort to keep long rates at historically low levels. 

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).

Radar Watching: February 2012

As I have noted in the past, since the home price index data provided by Radar Logic is more timely, unadjusted and un-smoothed it is particularly useful for gaining deeper visibility over our housing markets.

As for the latest trends, it’s important to note that the 25-MSA Composite is continuing to show significant year-over-year declines with prices breaking to new lows with each passing day.

The latest data shows that as of early-February, prices have declined 4.43% below the level seen in February 2011 continuing the slump through the winter months in a similar manner to past years while likely just reaching the lows of the season.

Look for future reports to indicate flat pricing as the data moves into the more active spring months leading to a new seasonal upswing as we approach early summer.

Envisioning Employment: Employment Situation March 2012

Today’s Employment Situation Report indicated that in March, net nonfarm payrolls increased with private nonfarm payrolls adding 120,000 jobs and the unemployment rate going flat at 8.2% over the same period.

Net private sector jobs increased 0.11% since last month climbing 1.93% above the level seen a year ago but but remained a whopping 4.14% below the peak level of employment seen in December 2007.