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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 and the Pending Home Sales index.
- The Purchase index decreased 3.0 percent from the previous week, indicating continued weakness in the housing markets. The index does not account for cash purchases, which made up 30.2 percent in May of this year. Morgage application data only measures applications, not approvals, and at times have shown a widely diverging trend compared to actual home sales.
- Refinancing activity declined 2.6 percent from the prior week. Mortgage rates on a 30-year fixed mortgage decreased from 4.57 percent to 4.46 percent during the week.
- The Pending Home Sales Index, a forward-looking indicator, increased 8.2 percent to 88.8, based on contracts signed in May, from 82.1 in April. The index is 13.4 percent above 78.3 recorded in May 2010. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.
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