Mortgage Appications Surge on Improved Rates

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Mortgage and Lending

This morning several important reports were released.  In advance of the economic reports, the Mortgage Bankers Association released their weekly survey of mortgage application.
Last week, applications jumped by 124.6% over the activity seen in the same week last year and up 48% over the previous week's activity.
Sometimes I get a laugh reading the newswires.  This morning the article on mortgage applications stated that the boost in applications coincided with another drop in mortgage rates as the "government's efforts to thaw out the home-mortgage market show further signs of having the desired effect."  The government hasn't really "done" anything yet, they've mostly just talked about doing something.  That's what left me laughing.
According to the MBA, rates on 30-year fixed rate mortgages averaged 5.04 last week with the 15-year trailing slightly at 4.91.
In other news, the weekly Jobless claims hit a 26 year high reporting a rise of 30,000 to  586,000.  This is the number of first time applications for state unemployment and the largest number since 1982.
November durable goods orders fell 1% while a decline of 3% was expected.  Consumer spending fell 0.6% in November which wasn't quite as bad as analysts were expecting.  Personal Income also fell in November following a slight gain in October.  Keep in mind that this poor economic news is typically Bond friendly.
Some good news...the Fed's mantra has been "inflation has moderated"  and it is evidenced by the Core Personal Consumption Expenditure which stands at 1.9% year over year.  Jethro's bubbling crude is down another 6% to 36.63 a barrel, which makes going to the gas pumps a lot less painful.
Today's trading will be thin as we head into the holiday.  Currently we are trading just above support.  Any activity today will be exacerbated and could result in some big swings.  
Circling back to mortgage applications and rates...if you have been sitting the sideline and thinking of a refinance, you might want to go ahead and get your application started.  If you have your paperwork in order and application submitted, you are in a perfect position to lock in on a great rate.   Keep in mind the best rates we have experienced in 2008 have not even lasted a full business day.  With the big surge in applications if you aren't prepared in advance, you may miss out.

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