The Mortgage Bankers Association composite index for the week ending July 23 declined a seasonally adjusted 4.4 percent from one week earlier, but there was some good news hidden in the results. The purchase index increased 2.0 percent from one week earlier and is the highest purchase index observed in the survey since the end of June. With nearly all of the recent media reports declaring bad news for home purchases, this tidbit came as a pleasant and welcomed surprise. Since this report focuses on applications, it is a forward-looking index and the increase in purchase applications is a positive sign that sales in the near term will increase, albeit slightly. The positive implication is that an increase in mortgage applications indicates a change in the momentum in the market. We will be watching for next week’s results to see if this change starts a positive upward trend or if it was merely a blip on the radar.
The refinance index decreased 5.9 percent from the previous week, which brought down the overall index and is an indication that most of those who could benefit from refinancing may have already taken those steps. With historic low mortgage rates for the past few weeks, this change in the trend in refinancing is not a surprise. If you plan to stay in your home for at least three years and have not refinanced in the past two, it is recommended that you speak with a mortgage professional to see if refinancing would be the right financial decision for you. There is no guarantee on the future direction of mortgage rates, but with so little room for them to continue down, most analysts predict an increase in rates by this time next year. Don’t wait until rates go back up to improve your financial picture – email us today at email@example.com to see if refinancing is right for you.