US MBA Purchase Index (Aug/07) 157.9 (Prev. 154.0)

The MBA purchase index is a weekly, seasonally noisy gauge of mortgage applications for home purchase, and a single week's rise of this size sits well within the series' normal week-to-week variation. The distinction that has mattered historically is between the purchase component, which tracks housing demand, and the refinance component, which tracks rate levels; the two respond to different drivers and a rise in one does not imply the other. Moves in this series have tended to shift front-end rate expectations only at the margin, with housing data of greater consequence being the monthly starts, permits and homebuilder surveys. What is worth watching is persistence: a multi-week trend in purchase applications against the prevailing mortgage rate backdrop has historically been the tell for underlying demand, not any individual print. Calendar follow-ons are the subsequent weekly releases and the next round of monthly housing data, where confirmation or reversal typically emerges.