US MBA Mortgage Applications (Jul/17) 1.9%

The weekly MBA applications index is a low-tier US release that rarely moves anything beyond the margins of the rates complex; its value is as a running gauge of housing demand sensitivity to the level of mortgage rates, with the purchase and refinance components behaving differently. Refinancing is the volatile leg, swinging sharply with small moves in rates, while the purchase index is the slower, more informative read on underlying demand. A positive print of this size sits within the series' normal weekly noise and carries little signal on its own. Historically the number gains relevance only in clusters, a sustained run of strength or weakness in purchase applications has tended to front-run the official housing data, since it leads new home sales and feeds into the starts pipeline. The distinction worth drawing is rate-driven refi noise versus genuine purchase momentum; the follow-ons are the composition breakdown and how the series trends into the next existing and new home sales prints.