US Mortgage Applications Dip, Housing Market Seeks Revival
Macro Recap: Weak Industrial Growth in the UK and China (Part 1 of 3)
Global indicator releases on March 11
Wednesday, March 11 saw an important housing sector indicator from the US side, a couple of industrial production and inflation releases coming from Europe, and industrial and retail figures from China. There were also trade figures from India. It looks like the day had something for everyone. Let’s take a quick look at each one of these indicators in our macro recap for March 11.
US housing market strives to regain investor confidence
Mortgage applications really dove during the fourth quarter last year. They recovered a little in January, but fell again in February 2015. Investors in real estate sector ETFs—like the iShares Dow Jones US Real Estate Index Fund (IYR) and the Vanguard REIT ETF (VNQ)—look out for this report.
Both of these ETFs are invested in US real estate firms like Prologis, Inc. (PLD), Ventas, Inc. (VTR), and HCP, Inc. (HCP). As of March 3, 2015, IYR and VNQ were invested up to 2.5% and 3.1% in Prologis, up to 2.9% and 3.5% in Ventas, and up to 2.3% and 3% in HCP.
Mortgage applications dip as interest rates are high
The Mortgage Bankers Association in the US came out with the March 6 release of its Weekly Applications Survey. The index is a leading indicator of housing and mortgage finance activity in the US. The index values are calculated with the week of March 16, 1990, as the base.
In the US, applications for mortgages decreased by 1.3%—compared to the previous week. Applications for purchases increased by 2%. Applications for refinances decreased by 3%. The slowdown in refinances could be attributed to the slight rise in interest rates. For example, the average rate for a 30-year fixed-rate mortgage was 4.01%—compared to 3.96% in the previous week.
Let’s move on to some industrial production figures that were released in the Europe the same day.
Browse this series on Market Realist:
