Mortgage Applications Decrease In Latest MBA Weekly Survey

Mortgage applications decreased 3.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 9, 2021. 

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week and was 31 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 51 percent higher than the same week one year ago.

“Purchase and refinance applications declined, with most of the pullback coming earlier in the week when rates were higher. Treasury yields started last week high – close to the prior week’s level at over 1.7 percent – before decreasing 6 basis points,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Refinance activity has now decreased for nine of the past 10 weeks, as rates have gone from 2.92 percent to 3.27 percent over the same period. Last week’s index level was the lowest in over a year, as mortgage rates continue to trend higher. Many borrowers have either already refinanced at lower rates or are unwilling – or unable – to refinance at current rates.”

Added Kan, “The third straight week of declining purchase activity is a sign that rising home prices and tight supply are constraining home sales – especially in the lower price tiers. Purchase applications were still above last year’s pandemic-impacted low point, but fell behind the level of activity seen the same week in 2019.”

The refinance share of mortgage activity decreased to 59.2 percent of total applications from 60.3 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 increased to 10.8 percent from 10.2 percent the week prior. The VA share of total applications decreased to 12.1 percent from 13.8 percent the week prior. The USDA share of total applications decreased to 0.4 percent 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) decreased to 3.27 percent from 3.36 percent, with points decreasing to 0.33 from  0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.35 percent from 3.41 percent, with points decreasing to 0.34 from 0.41 (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 3.24 percent from 3.36 percent, with points increasing to 0.40 from 0.36 (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 2.67 percent from 2.74 percent, with points increasing to 0.44 from 0.32 (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 decreased to 2.60 percent from 2.92 percent, with points decreasing to 0.37 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.