After showing negative numbers in the past month or so, the Mortgage bankers Association reported that its Market Composite Index, a measure of total loan application volume, rose by 11.2% in the latest survey. The refinance index jumped by 18% while the purchase index rose by 3%. The recent rise in home loan rates is one of the main reasons for the recent drop off in applications.
Over in housing news, the Commerce Department reported that Housing Starts rose by 0.9% from July to August to an annual rate of 891,000 units. That was below the 910,000 that was expected - July was revised lower to 883,000 from 896,000. Building Permits, a sign of future construction, fell by 3.8% to 918,000 units, below the 943,000 expected. However, there was a surge in single-family Permits, a sign that the housing recovery is continuing.
The Federal Reserve's long awaited monetary policy statement will be released this afternoon at 2:00pm ET. There is no chance of the Fed raising the benchmark Fed Funds Rate, currently at 0.25%. However, the Fed can start to ease back on the $85 billion per month in Bond purchases. The Fed could announce a $10 billion to $15 billion reduction. The statement will be accompanied by the Fed's Economic Projections (forecasts) and a press conference with Fed Chairman Bernanke will follow at 2:30pm ET.