MBA Chart of the Week: Purchase Application Index By Week of Year (NSA)

Applications for purchase mortgages have made a strong start in 2016, thus far averaging 23% higher compared to the same week in 2015.   

Last week, the not seasonally adjusted purchase index was at its highest level since May 2010 (its second-highest level when seasonally adjusted). As can be seen in the not-seasonally adjusted data in the chart, national purchase application activity typically peaks in May.   

Applications for new homes are included in the purchase application index and are also highlighted in MBA’s separate Builder Application Survey. In March, the BAS Index reached its highest level since its inception in 2012 and was more than 18 percent higher than a year ago. During the past three years, peak mortgage application activity for new homes has taken place in March and April.  

Strong job growth, modest wage increases and low interest rates help to explain the uptick in overall activity, while low inventories of for-sale homes and strong house price appreciation are encouraging the production of new homes.   

To view the Chart of the Week, click https://www.mba.org/news-research-and-resources/forecasts-data-and-reports/forecasts-and-commentary/chart-of-the-week.  

(Lynn Fisher is vice president of research and economics with the Mortgage Bankers Association; she can be reached at lfisher@mba.org. Joel Kan associate vice president of economic forecasting with MBA; he can be reached at jkan@mba.org.)