According to the Mortgage Bankers Association, the total number of mortgage applications rose 6.1% last week and reversed most of the declines during the prior three periods although applications so far in October remained 4.2% below the September average.

Purchase applications jumped 7.3% w/w and pulled this month's level 1.5% below September's which rose 1.0% from August. During the last ten years there has been a 49% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.

Applications to refinance reversed nearly all of the prior week's decline with a 4.5% rise.

The effective interest rate on a conventional 30-year mortgage rose further to 6.35% and is up from 6.03% averaged in September. The low for 30 year financing was 5.71% in late June. The effective rate on a 15-year mortgage rose to 5.95% and increased from the low of 5.33%. The interest rate on 15 and 30 year mortgages are closely correlated (>90%) with the rate on 10 year Treasury securities.

The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site here.