Data: Mortgage Applications Decrease In Latest MBA Weekly Survey

Mortgage applications decreased 6.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 25, 2021. 

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week and was 15 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 17 percent lower than the same week one year ago.

“Mortgage application volume fell to the lowest level in almost a year and a half, with declines in both refinance and purchase applications. Mortgage rates were volatile last week, as investors tried to gauge upcoming moves by the Federal Reserve amidst several divergent signals, including rising inflation, mixed job market data, strong consumer spending, and a supply-constrained housing market that has led to rapid home-price growth,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Purchase applications for conventional loans declined last week to the lowest level since last May. The average loan size for total purchase applications increased, indicating that first-time homebuyers, who typically get smaller loans, are likely getting squeezed out of the market due to the lack of entry-level homes for sale.”

The refinance share of mortgage activity decreased to 61.9 percent of total applications from 62.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 3.6 percent of total applications.

The FHA share of total applications remained unchanged from 9.5 percent the week prior. The VA share of total applications decreased to 10.5 percent from 11.2 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.20 percent from 3.18 percent, with points decreasing to 0.39 from 0.48 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.23 percent from 3.26 percent, with points decreasing to 0.33 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.19 percent from 3.21 percent, with points remaining unchanged at 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.56 percent from 2.58 percent, with points decreasing to 0.37 from 0.39 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.98 percent from 2.69 percent, with points decreasing to 0.23 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.