Wednesday, February 17, 2021

MBA: Mortgage Applications Decrease in Latest Weekly Survey

by Calculated Risk on 2/17/2021 07:00:00 AM

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

Mortgage applications decreased 5.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 12, 2021.

... The Refinance Index decreased 5 percent from the previous week and was 51 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 15 percent higher than the same week one year ago.

“Expectations of faster economic growth and inflation continue to push Treasury yields and mortgage rates higher. Since hitting a survey low in December, the 30-year fixed rate has slowly risen, and last week climbed to its highest level since November 2020,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The uptick in rates has slightly dampened refinance activity, with MBA’s index falling for the second week in a row, and the overall share dipping below 70 percent for the first time since last October.”

Added Kan, “The housing market in early 2021 continues to be constrained by low inventory and higher prices. Conventional and government applications to buy a home declined last week, but purchase activity overall is still strong – up 15 percent from last year. The average purchase loan size hit another survey high at $412,200, partly due to a larger drop in FHA applications, which tend to have smaller-than average loan sizes.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 2.98 percent from 2.96 percent, with points increasing to 0.43 from 0.36 (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 (but will be down year-over-year in early March - since rates fell sharply at the beginning of the pandemic).

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

According to the MBA, purchase activity is up 15% year-over-year unadjusted.

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