Mortgage Applications Increase in Latest MBA Weekly Survey
WASHINGTON, D.C. (December 16, 2020) - Mortgage applications increased 1.1 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending December 11, 2020.
The Market Composite Index, a measure of mortgage loan application volume, increased 1.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.4 percent compared with the previous week. The Refinance Index increased 1 percent from the previous week and was 105 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 26 percent higher than the same week one year ago.
"U.S. Treasury rates stayed low last week, in part due to uncertainty over the prospects of additional pandemic-related government stimulus, as well as concerns about the continued rise in COVID-19 cases across the country. Mortgage rates as a result fell to another survey low, with the 30-year fixed mortgage rate dropping five basis points to 2.85 percent," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Homeowners once again acted on the decline in rates, with refinance activity rising for the second straight week and up 105 percent from a year ago."
Added Kan, "The ongoing strength in the housing market has carried into December. Applications to buy a home increased for the fourth time in five weeks, as both conventional and government segments of the market saw gains. Government purchase applications rose for the sixth straight week to the highest level since June - perhaps a sign that more first-time buyers are entering the market."
The refinance share of mortgage activity increased to 72.7 percent of total applications from 72.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 1.8 percent of total applications.
The FHA share of total applications increased to 11.0 percent from 9.9 percent the week prior. The VA share of total applications decreased to 12.1 percent from 12.7 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 ($510,400 or less) decreased to a survey low of 2.85 percent from 2.90 percent, with points decreasing to 0.33 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
MBA Offices will be closed Thursday, December 24, 2020, and will reopen on Monday, January 4, 2021. Due to the holiday, the results for the weeks ending December 25, 2020, and January 1, 2021, will be released on January 6, 2021.
The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.