Wednesday, January 27, 2021

MBA: Mortgage Applications Decrease in Latest Weekly Survey

by Calculated Risk on 1/27/2021 07:00:00 AM

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 4.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 22, 2021.

... The Refinance Index decreased 5 percent from the previous week and was 83 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 16 percent higher than the same week one year ago.

“Mortgage rates were mixed last week, with the 30-year fixed rate rising to its highest level since November 2020 at 2.95 percent, and all other rates in the survey posting a decline. In a sign that borrowers are increasingly more sensitive to higher rates, large declines in government purchase applications and refinance applications pulled overall activity lower. The refinance index has now declined for two straight weeks, but is still 83 percent higher than last year,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase applications also decreased last week, but the impressive trend of year-over-year growth since the second half of 2020 has continued in early 2021. Activity was up 16 percent from a year ago, and the average purchase loan amount hit another record high of $395,200. Since hitting a recent low in April 2020, the average purchase loan amount has steadily risen – in line with the accelerating home-price appreciation occurring in most of the country because of strong demand and extremely low inventory levels.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 2.95 percent from 2.92 percent, with points decreasing to 0.32 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added
Mortgage Refinance IndexClick on graph for larger image.


The first graph shows the refinance index since 1990.

The refinance index has been volatile recently depending on rates.

With near record low rates, the index remains up significantly from last year.

Mortgage Purchase Index The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is up 16% year-over-year unadjusted.

Note: Red is a four-week average (blue is weekly).