It’s tough to put too much stock into the Mortgage Bankers Association weekly applications survey- it is after all a second tier indicator of real estate activity, and tends to be volatile (see: image above of the last six weeks of headlines,) but there are a couple of interesting things we can take away by checking in on this periodically.
Take this week’s report, for instance:
“The Refinance Index increased 16.5 percent from the previous week. The seasonally adjusted Purchase Index increased 4.5 percent from one week earlier.”
There’s only one thing that causes refinance activity to spike – lower mortgage rates. And with 30 year fixed rates at levels we have not seen since the tail end of November of 2010, we definitely have those [For reference: The national averages are checking in at about 4.5%, with many borrowers bettering that by .125% to .25%]
But what is better than a spike in refinance acivity?
It is nice to see home buyers joining the party. And there is reason to party for some – rates and prices simultaneously at or near decade-lows is not something that happens very often, no matter the state of the economy or real estate market.
That said, it is both troubling and telling that purchase activity is still hovering at 1997 levels. It speaks to the ongoing hangover from the real estate downturn, and more particularly, how much a weak economy with next to zero job creation hinders the real estate market.
But we here at BTM Headquarters remain convinced that those willing and able to be buyers here (at the intersection of Low Rate Street and Bargain Price Avenue) may look back on this as the buy of a lifetime in ten years, no matter where the shorter term price trend goes.