Morning Report: Refinance Index hits lows of early 2018

Vital Statistics:

 LastChange
S&P futures4,18010.25
Oil (WTI)100.22-1.49
10 year government bond yield 2.75%
30 year fixed rate mortgage 5.30%

Stocks are higher this morning as some big tech companies report earnings. Bonds and MBS are flat.

Mortgage Applications fell 8.3% last week as purchases fell 8% and refinances fell 9%. “With mortgage rates increasing last week to the highest level since 2009, applications continued to decline,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Overall application activity fell to the lowest level since 2018, with both purchase and refinance applications posting declines. Refinance applications were 70 percent below the same week a year ago, when the 30-year fixed rate was in the 3-percent range.”

The average mortgage rate rose from 5.2% to 5.37%. The refinance share of mortgage activity fell to 35%. The MBA refinance index is back to early 2018 levels.

Chart: MBA refinance index:

Pending Home Sales fell again in March, according to NAR. This is the fifth monthly decline in a row. “The falling contract signings are implying that multiple offers will soon dissipate and be replaced by much calmer and normalized market conditions,” said Lawrence Yun, NAR’s chief economist. “As it stands, the sudden large gains in mortgage rates have reduced the pool of eligible homebuyers, and that has consequently lowered buying activity. The aspiration to purchase a home remains, but the financial capacity has become a major limiting factor.”

The Senate has confirmed Lael Brainard as the vice-chair of the Fed.

Author: Brent Nyitray

In the physical sciences, knowledge is cumulative. In the financial markets, it is cyclical

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