Wednesday, May 05, 2021

MBA: Mortgage Applications Decrease in Latest Weekly Survey

by Calculated Risk on 5/05/2021 07:00:00 AM

From the MBA: 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 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 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.
emphasis added
Mortgage Refinance IndexClick on graph for larger image.


The first graph shows the refinance index since 1990.

With low rates, the index remains elevated, but below recent levels since mortgage rates have moved up from the record lows.

The second graph shows the MBA mortgage purchase index

Mortgage Purchase Index According to the MBA, purchase activity is up 24% year-over-year unadjusted.

Note: The unadjusted MBA purchase index will be up sharply year-over-year for another week or two, since purchase activity collapsed in the early weeks of the pandemic.

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