What is the Weekly Mortgage Applications Survey
BREAKING DOWN Weekly Mortgage Applications Survey
Each week the MBA draws on the Weekly Mortgage Applications Survey to publish reports and commentary on the state of real estate financing, including new home purchases, refinancing, and mortgages. Each week’s reports include indices tracking changes in fixed-rate, adjustable, conventional and governmental loans and refinances. It is important to note that the Weekly Mortgage Survey primary tracks data on the mortgage applications submitted each week, as opposed to mortgage loan applications that close.
Since the launch of the Weekly Mortgage Applications Survey in 1990, its indices have served as leading indicators in the housing and mortgage finance industries. While most of the stakeholders with an interest in the trends charted by the Weekly Application Survey may be focused on recent trends and near-term forecasting, the available data also provide historical perspectives on macro-trends in these industries.
While the Weekly Applications Survey has only been in operation since 1990, the Mortgage Bankers Association has existed since 1914. Initially known as the Farm Mortgage Bankers Association of America, the organization convened to provide loans for farmland. In 1926, the organization changed its name to Mortgage Bankers Association of America.
While anyone working in the real estate finance industry is eligible to join, MBA membership is largely composed of independent mortgage banks. The remainder of the membership comprises commercial and community banks, credit unions, mortgage servicers, insurance and title companies, and more. The Weekly Applications Survey aggregates member-reported data for its weekly reports.
Indices Drawn from the Weekly Mortgage Applications Survey
Each Wednesday, the MBA publishes the results of the previous week’s survey with comparative data analysis to chart market trends. Real estate market stakeholders pay particular attention to two of these indicies: the MBA Refinance Index and the MBA Purchase Index.
The MBA Refinance Index tracks the number of refinance applications submitted, reporting the week’s total alongside the percentage change from the prior week and the four-week moving average of the index.
This tool can be useful in forecasting mortgage activity. Some analysts look to refinancing data to predict other forms of consumer spending, while mortgage investors look to this index for trends that will impact them, especially as a wave of refinancing can decrease payments over time to mortgage investors.
Similarly, the MBA Purchase Index counts the number of new home loan applications submitted each week. These figures are useful for builders and developers in forecasting new housing construction. Mortgage investors can also look to this index for market trend indicators, such as mortgage prepayment.