Category: Banking

Mortgage Purchase Applications Rise 1% From Previous Week, But Down 18% From Last Year Thanks To Unaffordable Home Prices

Simply unaffordable is what singer Robert Palmer would say. Homes, that is.


Mortgage applications increased 2.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 6, 2021.

The Refinance Index increased 3 percent from the previous week and was 8 percent lower than the same week one year ago. But recent declines in mortgage rates have produced a mini-refi wave (pink box).

The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 18 percent lower than the same week one year ago. But rapidly rising home prices have cooled mortgage purchase applications since the beginning of 2021.

Here is the data from the MBA showing a rise in mortgage applications from the previous week of 2.79%.

Inflation report coming up next!

US Real Average Hourly Earnings “Rise” To -1.2% YoY While Core Inflation Decreases Slightly To 4.3% YoY

US inflation remains nears its highest level since 1991, but moderated slightly.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in July on a seasonally adjusted basis after rising 0.9 percent in June, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 5.4 percent before seasonal adjustment.

The indexes for shelter, food, energy, and new vehicles all increased in July and contributed to the monthly all items seasonally adjusted increase. The food index increased 0.7 percent in July as five of the major grocery store food group indexes rose, and the food away from home index increased 0.8 percent. The energy index rose 1.6 percent in July, as the gasoline index increased 2.4 percent and other energy component indexes also rose.

US Real Average Hourly Earning YoY “rose” to -1.2% as core inflation “moderated” to +4.3%, the second highest reading since 1991.

Core inflation remains at 1991 levels.

With core CPI growing at 4.3%, the baseline Taylor Rule model implies that the Fed Funds target rate should be 7.05%, not the current rate of 0.25%.

As The Fed keeps rolling the dice on zero-interest rate policies.