Mortgage Applications Decrease In Latest MBA Weekly Survey

Mortgage applications decreased 0.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 30, 2021. 

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index increased 0.1 percent from the previous week and was 17 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 24 percent higher than the same week one year ago.

“There was a mixed bag of action in the mortgage market last week. Mortgage rates were slightly higher, refinance applications were essentially unchanged, and purchase applications fell for the second straight week,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Both conventional and government purchase applications declined, but average loan sizes increased for each loan type. This is a sign that the competitive purchase market, driven by low housing inventory and high demand, is pushing prices higher and weighing down on activity. The higher prices are also affecting the mix of activity, with stronger growth in purchase loans with larger-than-average balances.”

Added Kan, “An increase in conventional refinances was offset by a decline in government refinances. The 30-year fixed rate was up slightly to 3.18 percent, which is still 22 basis points lower than a year ago, but higher than it was between mid-2020 and February 2021.”
The refinance share of mortgage activity increased to 61.0 percent of total applications from 60.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.9 percent of total applications.

The FHA share of total applications decreased to 10.1 percent from 10.7 percent the week prior. The VA share of total applications decreased to 11.9 percent from 12.2 percent the week prior. The USDA share of total applications remained unchanged from 0.4 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 3.18 percent from 3.17 percent, with points increasing to 0.34 from  0.30 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) increased to 3.31 percent from 3.28 percent, with points decreasing to 0.27 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.13 percent from 3.12 percent, with points decreasing to 0.22 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.54 percent from 2.55 percent, with points increasing to 0.31 from 0.30 (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 2.76 percent from 2.59 percent, with points decreasing to 0.23 from 0.47 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.