New Home Sales aren't likely to pickup anytime soon, refinancing continues strong
Home sales aren't likely to pick up "anytime soon" is the conclusion of the Mortgage Bankers Association whose purchase index remains depressed, down 1.9% in the January 14 week to extend a run of weakness. Refinancing is another matter as those who already own a home seek to lock in low rates. The refinance index rose 7.7% in the week with the average 30-year rate at 4.77% vs 4.78% in the prior week. Housing starts will be posted today at 8:00 a.m. ET.
The Market Composite Index, a measure of mortgage loan application volume, increased 5.0% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6.4% compared with the previous week.
The Refinance Index increased 7.7% from the previous week. This is the third consecutive weekly increase in refinance applications and is the highest Refinance Index observed since the beginning of December. The seasonally adjusted Purchase Index decreased 1.9% from one week earlier. The unadjusted Purchase Index increased 3.1% compared with the previous week and was 16.0% lower than the same week one year ago.
"Mortgage rates have moved somewhat lower since the beginning of the year, as mixed data on the job market continue to cloud the outlook for the economy," said Michael Fratantoni, MBA's Vice President of Research and Economics. "Refinance applications have picked up, as borrowers take advantage of lower rates, but purchase applications remain quite low, indicating that home sales are unlikely to pick up any time soon."