Daily Economic Update: Mortgage Purchase Applications

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights mortgage purchase applications, housing starts, and price data.

• Mortgage purchase applications fell 4.0 percent for the week ending March 11th. Purchase applications are a leading indicator of home sales.
• However, purchase applications do not always translate into loan acceptances and transactions. Also, purchase applications do not take into consideration cash buyers who according to the January REALTORS® Confidence Index make up as much as 32 percent of transactions. In Las Vegas and Miami, the cash purchases have said to approach 50 percent.
• Mortgage purchase applications were down 15.8 percent from the same week a year ago.
• Consumers took advantage of low mortgage rates, which fell to 4.79 percent on a 30-year fixed mortgage. Refinances, which accounted for 66.4 percent of mortgage activity, rose 0.9 percent.
• Housing starts were weak in February declining from an annualized pace of 479,000 compared to a rate of 560,000 units the month before.
• Multifamily starts fell 46.1 percent after a surge in January. Single family starts were down 11.8 percent in February. Lower levels of housing starts helps with the overhang in the housing industry, but hinters the economic recovery where home building can lead to more economic activity and construction jobs.
• Price continued to move higher, with producer prices rising 1.6 percent in February, led by rising food and energy costs.
• Core prices, which exclude food and energy, were more tame, but still up 0.2 percent.