What happened

AGNC Investment (AGNC 0.99%) was up as much as 4% in morning trading on Wednesday, the day before Thanksgiving. As of 2:30 p.m. ET, the stock price was up 2.8% to $9.77 per share.

The major stock market indexes were all moving higher on Wednesday with the Nasdaq Composite leading the way, up about 96 points, or 1%, as of 2:30 p.m. ET.

So what

It has been a difficult year for AGNC Investment, a mortgage real estate investment trust (REIT), but it got a little brighter on Wednesday on some decent industry news.

The Mortgage Bankers Association's Weekly Mortgage Application survey came out Wednesday and showed a slight uptick in mortgage application volumes for the week ended Nov. 18. The survey showed that volumes were up 2.2% on a seasonally adjusted basis from the previous week, and 10% on an unadjusted basis.

Also, the Refinance Index increased 2% from the previous week, but was still 86% lower than the same week a year ago. Further, the Purchase Index jumped 3% last week on a seasonally adjusted basis and 9% on an unadjusted basis. But it was some 41% lower than it was last year at this same time.

The catalyst for the improvement was a drop in mortgage interest rates. The 30-year fixed-rate mortgage dropped to 6.67% from 7.08% the previous week.

Joel Kan, the Mortgage Bankers Association's vice president and deputy chief economist, said:

The decrease in mortgage rates should improve the purchasing power of prospective homebuyers, who have been largely sidelined as mortgage rates have more than doubled in the past year. As a result of the drop in mortgage rates, both purchase and refinance applications picked up slightly last week. However, refinance activity is still more than 80 percent below last year's pace. 

Now what

Mortgage rates were down last week due to the fact that inflation numbers dropped in October and may have peaked. But the housing market still remains in a funk, as home sales are way down from a year ago due to a combination of high mortgage rates, low inventory, and still-elevated home prices.

With the Federal Reserve still raising interest rates, however, the market is unlikely to see much improvement well into next year, potentially 2024. While this weekly report shows some promise, it is probably best to wait until the Fed stops tightening or slows down its pace to check back in with AGNC.

It does, however, offer a $0.12 monthly dividend at a yield of 15%, which it has maintained since the start of the pandemic, when it dropped from $0.16. AGNC may be worth considering for its dividend, but it still might be best to wait for more visibility on where rates and inflation are headed.