Highlights
The purchase index fell nearly 5 percent in the Jan. 18 week to 439.9, a level good enough to push the four-week average up about 3 percent to 419.0. This index has been swinging back and forth in a 100-point range over the past several weeks, reflecting adjustment problems surrounding the holidays and continued dislocations in the credit market as prospective homeowners search for loans.

Volatility is also sweeping the refinancing index which jumped 17 percent to 4,178.2 with refinancings making up 66.0 percent of all applications. The rise in this index likely does reflect underlying demand as loan rates come tumbling down, averaging 5.49 percent for 30-year fixed mortgages for a 13-basis-point decline in the week.

This report has become way too volatile to affect the outlook for the housing market or the financial markets. This week's highlight for the housing market, and hopefully it will be a highlight, is the existing home sales report which will be posted tomorrow morning at 10:00 a.m. ET.