Refinances Boost Mortgage Applications, ISM Indices Push Above 50
February 8, 2010 - Mortgage applications rose 21% last week, reaching their highest level in nearly six weeks according to data released by the Mortgage Bankers Association. Refinances were the most prevalent contributor to the gain, rising 26.3%, while purchase loan requests rose a more modest 10.3%. Many are optimistic that the Spring selling season could be surprisingly strong.
With mortgage applications are back on the rise, the U.S. unemployment rate dropped to 9.7% during the month of January. Shifting down from an unrevised 10.0% in December, nonfarm payrolls fell 20,000 for the month. Analysts were by and large pleased with the drop in the overall rate.
Treasury Secretary Timothy Geithner commented this past weekend that the current recovery is likely to be very uneven but should continue strengthen in coming quarters. Last week's January's ISM manufacturing index release reached its highest level in five years, rising to 58.4% from December's reading of 54.9%. In related news, the ISM non-manufacturing index reached 50.5% last month, up 0.7% from the 49.8% registered the prior month. The index, which covers services, construction and finance, has continually been less robust than other job sectors of the economy.
This week has less in the way of economic releases but with Retail Sales data due we could see some influence on rates especially if sales come in stronger than most analysts are predicting.