The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey is a data point I often expose for anomalous factors, usually seasonal in nature. So when I read about a big year-over-year increase in mortgage applications for home purchases in the latest report my suspicion was aroused.
However, after perusing through a pile of data, I found nothing of the sort. The year-to-year growth in activity has been sustained over recent reporting periods. Therefore I can confidently report that it truly reflects health in housing. The MBA reported its Weekly Mortgage Applications Survey for the week ending February 5, 2016 this morning. The report showed the Market Composite Index of mortgage applications rose 9.3% week-to-week, after seasonal adjustment. Mortgage rates dropped significantly in the period, driving applications for mortgage refinancing up 16% over the immediately preceding week. The Purchase Index, which measures applications made for the purchases of new and existing homes, increased just 0.2% on a week-to-week basis after seasonal adjustment. Excluding the seasonal adjustment, the Purchase Index increased 7%.