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Purchase Apps Are Up 6.3%

The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending September 3, 2010 today. 

MBA's application surveys 50% of all U.S. residential mortgage loan applications taken out by commercial banks, mortgage bankers, and thrifts. This data gives economists an overview of the consumer demand for mortgage loans in the US.

During a low mortgage rate environment, we see a trend of increasing refinance applications which 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, as it 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 seasonally adjusted Purchase Index increased 6.3 percent from one week earlier. The unadjusted Purchase Index increased 4.0 percent compared with the previous week and was 38.8 percent lower than the same week one year ago. The four week moving average is up 1.3 percent for the seasonally adjusted Purchase Index.