Economic Release
US: MBA Mortgage Applications
Date: April 9, 2025 06:00 AM CT
| Actual | Previous | |
|---|---|---|
| Composite Index - W/W | 20.0% | -1.6% |
| Purchase Index - W/W | 9.2% | 1.5% |
| Refinance Index - W/W | 35.3% | -5.6% |
Highlights
The MBA mortgage applications index is 20.0 percent higher in the April 4 week. It is 8.5 percent higher than four weeks ago and 49.4 percent higher than a year earlier. The purchase index is 9.2 percent higher in the current week and 11.7 percent higher than four weeks ago and 24.5 percent higher than a year earlier. The refinancing index is 35.3 percent higher and is 5.5 percent higher than four weeks ago and 92.9 percent higher than a year earlier. In the April 4 week, refinancing accounted for 43.6 percent of mortgage applications compared to 38.6 percent in the prior week. There may be some pent-up demand being exercised now that the spring is here, as well as some refinancing activity for mortgage taken out at higher rates a few months ago.
MBA Deputy Chief Economist Joel Kan said, Mortgage applications increased by 20 percent to its highest level since September 2024, driven by purchase and refinance applications picking up in a volatile week where economic uncertainty caused rates to drop across the board. The 30-year fixed mortgage rate was 6.61 percent, the lowest rate since October 2024. said Joel Kan. He continued, Both homebuyers and refinance borrowers were quick to take advantage of this dip in rates, driving the purchase index 24 percent higher than a year ago to the strongest pace since January 2024.
However, many borrowers opted for adjustable-rate mortgages rather than a fixed-rate mortgage. There may be an expectation that rates will fall further and make it worthwhile to refinance to a fixed-rate mortgage before the rate adjustment. In the meantime, monthly housing costs will be more affordable.
The fixed-rate mortgage index is 17.3 percent higher in the April 4 week. It is 6.9 percent higher than four weeks ago and 46.7 percent higher than this week last year. The adjustable-rate mortgage index is 59.4 percent higher and is 30.5 percent higher than four weeks ago and 85.9 percent higher than a year ago.
The contract rate for a 30-year fixed-rate mortgage is 6.61 percent in the current week. This is 9 basis points lower than the prior week, 6 basis points lower than four weeks ago, and 40 basis points lower than a year earlier. The contract rate for a 5-year adjustable-rate mortgage is 5.93 percent in the week. This is 11 basis points lower than the prior week, 12 basis points higher than four weeks ago, and 48 basis points lower than a year earlier. In the April 4 week, adjustable-rate mortgages accounted for 8.6 percent of mortgage applications compared to 6.5 percent in the prior week.
MBA Deputy Chief Economist Joel Kan said, Mortgage applications increased by 20 percent to its highest level since September 2024, driven by purchase and refinance applications picking up in a volatile week where economic uncertainty caused rates to drop across the board. The 30-year fixed mortgage rate was 6.61 percent, the lowest rate since October 2024. said Joel Kan. He continued, Both homebuyers and refinance borrowers were quick to take advantage of this dip in rates, driving the purchase index 24 percent higher than a year ago to the strongest pace since January 2024.
However, many borrowers opted for adjustable-rate mortgages rather than a fixed-rate mortgage. There may be an expectation that rates will fall further and make it worthwhile to refinance to a fixed-rate mortgage before the rate adjustment. In the meantime, monthly housing costs will be more affordable.
The fixed-rate mortgage index is 17.3 percent higher in the April 4 week. It is 6.9 percent higher than four weeks ago and 46.7 percent higher than this week last year. The adjustable-rate mortgage index is 59.4 percent higher and is 30.5 percent higher than four weeks ago and 85.9 percent higher than a year ago.
The contract rate for a 30-year fixed-rate mortgage is 6.61 percent in the current week. This is 9 basis points lower than the prior week, 6 basis points lower than four weeks ago, and 40 basis points lower than a year earlier. The contract rate for a 5-year adjustable-rate mortgage is 5.93 percent in the week. This is 11 basis points lower than the prior week, 12 basis points higher than four weeks ago, and 48 basis points lower than a year earlier. In the April 4 week, adjustable-rate mortgages accounted for 8.6 percent of mortgage applications compared to 6.5 percent in the prior week.
Definition
The Mortgage Bankers' Association compiles various mortgage loan indexes. The purchase applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
Description
This provides a gauge of not only the demand for housing, but economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as the Mortgage Bankers Association purchase applications, investors can gain specific investment ideas as well as broad guidance for managing a portfolio.
Each time the construction of a new home begins, it translates to more construction jobs, and income which will be pumped back into the economy. Once a home is sold, it generates revenues for the home builder and the realtor. It brings a myriad of consumption opportunities for the buyer. Refrigerators, washers, dryers and furniture are just a few items new home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month.
Since the economic backdrop is the most pervasive influence on financial markets, housing construction has a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the MBA purchase applications index carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.
Each time the construction of a new home begins, it translates to more construction jobs, and income which will be pumped back into the economy. Once a home is sold, it generates revenues for the home builder and the realtor. It brings a myriad of consumption opportunities for the buyer. Refrigerators, washers, dryers and furniture are just a few items new home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month.
Since the economic backdrop is the most pervasive influence on financial markets, housing construction has a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the MBA purchase applications index carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.
