The NYT featured an article on the front page of the business section with a graph showing the Mortgage Bankers' Association (MBA) index for applications for refinancing mortgages. The index shows a sharp spike in recent weeks, which is presumably a response to lower mortgage interest rates.
While applications have undoubtedly risen, the MBA index likely overstates the increase for two reasons. First. MBA members only account for about half of the mortgages issued. Issuers who concentrated on the subprime segment of the market are underrepresented in the MBA. This could mean, that the index is not fully reflecting the collapse of the subprime market. Also, if borrowers shift from non-MBA members (many of whom have shut down) to MBA members, the shift would appear as an increase in applications in the MBA index.
The other reason why the MBA index may overstate the actual increase in refinancing is that it is far more common for mortgage applicants to be denied now than one or two years ago. In the past, the overwhelming majority of applications would have resulted in a mortgage bing issued. Now that banks are far more frequently denying mortgages, the same number of applications would correspond to fewer mortgages being issued. Without data on denial rates, it is impossible to know the extent to which the uptick in applications corresponds to an increase in the number of mortgages being issued.
I’m writing to you today with a sense of urgency that I haven’t felt since I began my journalism career. As executive editor of The American Prospect, I’ve witnessed firsthand how independent journalism serves as a crucial bulwark against the erosion of our democratic institutions. Today, that role is more vital than ever. Can you step up today and show your support?
The winds of authoritarianism are blowing stronger. We’re seeing alarming signs of a coordinated effort to silence critical voices and undermine the very foundations that support progressive causes. As Bob Kuttner presciently wrote in our August 2024 issue, a weaponized IRS could attack the very foundations of the progressive movement. We need readers to step up and help us dig in for the long haul.
We’re falling behind in our spring fundraising campaign, and with so much at stake we can’t afford to come up short. If you value fearless, independent journalism that holds the powerful accountable and defends democracy, now is the time to step up. The American Prospect depends on reader support to stay in the fight. Pitch in today and help us close the gap. Please consider making a donation today.
–David Dayen, Executive Editor
Copyright 2025 | The American Prospect, Inc. | All Rights Reserved
