US DATA: New Purchase Mortgage Applications See Fresh High Since Early 2023

New purchase mortgage applications extended their recent push higher in contrast to a further rolling over in refi activity, offering scope that recent cautious optimism for existing home sales might have continued in the near-term. 

• MBA composite applications fell -1.4% (sa) last week after 0.2%, essentially two weeks of little change for the volatile series, but new purchases again outperformed refis in another update where the details are more interesting than the headline suggests.
• New purchase applications increased 2.5% last week after 7.6% the week prior, maintaining their highest level since Feb 2023 after what is now an 18% increase since mid-Oct.
• In contrast, refi applications fell -4.4% after -5.7% and are down a cumulative 14% over the same period since mid-Oct for their lowest level since early September.
• Putting these moves into context, composite applications are at 65% of 2019 levels, new purchases still only at 72% and refis at 60%.
• The refi drop was a little more surprising in light of an 8bp decline in the 30Y mortgage rate in a move that mostly offset a 10bp increase over the previous four weeks.
• Mortgage swap spreads were little changed on the week having recently widened slightly but still at low levels by recent standards. The spread to 10Y swap rates held at 273bp having recently troughed at 267bp for its lowest since Apr 2022, but is still below the average 285bp in Q1 and a rough range of 300 +/-5bp for some months after reciprocal tariff announcements in April prompted more cautious lending standards.