Mortgage Applications Decrease in Latest MBA Weekly Survey

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Falen Taylor
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WASHINGTON, D.C. (September 1, 2021)Mortgage applications decreased 2.4 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending August 27, 2021. 

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week and was 2 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 16 percent lower than the same week one year ago.  

"There was little change in mortgage rates last week, with the 30-year fixed remaining at 3.03 percent. Despite low rates, refinance applications declined, with some borrowers still waiting for rates to drop even lower. Recent uncertainty around the economy and pandemic have kept rates low over the past month, which is why the refinance index has oscillated around these levels," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Even with a slight increase, purchase activity hit its highest level since early July, as applications for conventional and government loans increased. Home purchase activity continues to be dominated by higher price tiers of the market, with the purchase average loan size now at $396,500, the highest average in five weeks. According to FHFA, June's year-over-year increase in home prices was 18.8 percent, while the second quarter saw a 17.4 percent increase overall. Both measures set new records, as housing demand continued to outpace the inventory of homes for sale."  

The refinance share of mortgage activity decreased to 66.8 percent of total applications from 67.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.2 percent of total applications.

The FHA share of total applications increased to 11.2 percent from 11.0 percent the week prior. The VA share of total applications decreased to 9.7 percent from 10.0 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) remained unchanged at 3.03 percent, with points increasing to 0.34 from 0.29 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.  

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) remained unchanged at 3.13 percent, with points remaining unchanged at 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.  

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.09 percent from 3.10 percent, with points decreasing to 0.25 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.  

The average contract interest rate for 15-year fixed-rate mortgages increased to 2.39 percent from 2.38 percent, with points increasing to 0.30 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.  

The average contract interest rate for 5/1 ARMs increased to 2.80 percent from 2.68 percent, with points decreasing to 0.13 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

If you would like to purchase a subscription of MBA's Weekly Applications Survey, please visit www.mba.org/WeeklyApps, contact mbaresearch@mba.org or click here.

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.