Total mortgage applications rose last week for the first time following three consecutive weeks of decline according to the Mortgage Bankers Association. The 2.2% w/w increase nevertheless left applications in August 4.7% below July which fell 1.4% from June.

Purchase applications ticked up 0.1% last week and in August are 0.7% above the July average which rose 0.9% versus June. 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. Mortgage applications to refinance recovered 5.0% w/w following several weeks of sharp decline.

The effective interest rate on a conventional 30-year mortgage backpedaled to 6.03% from 6.16% the prior week. The effective rate on a 15-year mortgage also fell to 5.72%.

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.

Monetary Policy and Asset Price Bubbles from the Federal Reserve Bank of San Francisco is available here.