MBA Reports an increase on new home starts

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending July 30, 2010. 

The MBA's loan application survey covers over 50% of all U.S. residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a snapshot view of consumer demand for mortgage loans. In a low mortgage rate environment, a trend of increasing refinance applications implies consumers are seeking out a lower monthly payment. If consumers are able to reduce their monthly mortgage payment and increase disposable income through refinancing, it can be a positive for the economy as a whole (creates more consumer spending or allows debtors to pay down personal liabilities like credit cards). A falling trend of purchase applications indicates a decline in home buying demand, a negative for the housing industry and the economy as a whole.


The Market Composite Index, a measure of mortgage loan application volume, increased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1.4 percent compared with the previous week. The four week moving average for the seasonally adjusted Market Index is up 0.3 percent. 

The Refinance Index increased 1.3 percent from the previous week. The four week moving average is up 0.2 percent for the Refinance Index. The refinance share of mortgage activity remained flat at 78.0 percent of total applications from the previous week. 



The seasonally adjusted Purchase Index increased 1.5 percent from one week earlier. The four week moving average is up 0.9 percent for the seasonally adjusted Purchase Index.

This third straight weekly increase in the Purchase Index was driven by government purchase applications which increased 3.4 percent from last week, while conventional purchase applications were essentially flat. The unadjusted Purchase Index increased 1.5 percent compared with the previous week, was up 7.1 percent relative to four weeks ago, but was 33.7 percent lower than the same week one year ago.