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MBA: Mortgage Applications Decrease in Latest Weekly Survey


by Calculated Risk on 9/01/2021 07:00:00 AM

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

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 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 yearover-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 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.
emphasis added

Click on graph for larger image.

The first graph shows the refinance index since 1990.

With low rates, the index remains elevated.

The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 16% year-over-year unadjusted.

Note: The year ago comparisons for the unadjusted purchase index are now difficult since purchase activity picked up in late May 2020.

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

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