Wednesday, May 19, 2021

MBA: Mortgage Applications Increase in Latest Weekly Survey

by Calculated Risk on 5/19/2021 07:00:00 AM

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

Mortgage applications increased 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 14, 2021.

... The Refinance Index increased 4 percent from the previous week and was 2 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 2 percent higher than the same week one year ago.

“Mortgage rates increased last week, with all loan types hitting their highest levels in two weeks. Rates were still lower than levels reported in late March and early April, providing additional opportunity for borrowers to refinance. Despite the 30-year fixed rate rising to 3.15 percent, applications for conventional and VA refinances increased. Ongoing volatility in refinance applications is likely if rates continue to oscillate around current levels,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “A decline in purchase applications was seen for both conventional and government loans. There continues to be strong demand for buying a home, but persistent supply shortages are constraining purchase activity, and building material shortages and higher costs are making it more difficult to increase supply. As a result, home prices and average purchase loan balances continue to rise, with the average purchase application reaching $411,400 – the highest since February.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.15 percent from 3.11 percent, with points increasing to 0.36 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. T
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 2% year-over-year unadjusted.

Note: The year ago comparisons for the unadjusted purchase index will be more difficult going forward since purchase activity picked up in late May 2020.

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