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Purchase Mortgage Applications Through Pandemic Lows

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  • Composite MBA mortgage applications fell to the lowest level since 1997 last week after declining -14%, whilst purchase-only mortgages – a better guide of sales activity – cleared pandemic-disruption lows for the lowest since March 2015 and within 15% of also hitting late 1990s levels.
  • It comes as 30Y mortgage rates jumped from 6.52% to 6.75% (following the rise in the marginally more timely Freddie Mac mortgage rates), to now just 11bps below 2006 highs.
  • Subsequent rallies in Treasuries this week should help provide some marginal respite from a week-by-week basis (10YY at 3.68% are currently 14bps below last week’s average) but nevertheless remain consistent with a further sharp slowing in housing activity.

MBA 30Y rate (white), 10Y Tsy yield (pink), spread (red) and MBA purchase applications (green)Source: Bloomberg

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  • Composite MBA mortgage applications fell to the lowest level since 1997 last week after declining -14%, whilst purchase-only mortgages – a better guide of sales activity – cleared pandemic-disruption lows for the lowest since March 2015 and within 15% of also hitting late 1990s levels.
  • It comes as 30Y mortgage rates jumped from 6.52% to 6.75% (following the rise in the marginally more timely Freddie Mac mortgage rates), to now just 11bps below 2006 highs.
  • Subsequent rallies in Treasuries this week should help provide some marginal respite from a week-by-week basis (10YY at 3.68% are currently 14bps below last week’s average) but nevertheless remain consistent with a further sharp slowing in housing activity.

MBA 30Y rate (white), 10Y Tsy yield (pink), spread (red) and MBA purchase applications (green)Source: Bloomberg