Mortgages, Who Needs Them?

MBA Mortgage Applications (week ended 5/15/2015)

– Purchase Index Week/Week -4.0%. Previous weeks were  -0.2%, +1.0%, +0.0%, +5.0%, -3.0%, +7.0%, +6.0%, +5.0%, -2.0%, +2.0%, -0.2%, +5.0%, and -7.0%.

– Refinance Index Week/Week +0.3%. Previous weeks were -6.0%, -8.0%, -4.0%, +1.0%, -2.0%, -3.0%, +4.0%., +12.0%, -5.0%, -3.0%, -0.2%, and +1.0%.

– Composite Index Week/Week -1.5%. Previous weeks were -3.5%, -4.6%, -2.3%, +2.3%, -2.3%., +0.4%, +4.6%, +9.5%, -3.9%, -1.3%, -1.3%, +0.1%, and -8.0%.

I do not believe that higher rates have impacted purchases to any measurable extent.  Rates may be higher than a couple of months ago but the fact is that they are still low. Also, according to Core Logic about 38% of home sales are all cash.  The correlation between purchase applications and Home Sales is less than it was a few years ago.