by Calculated Risk on 7/07/2021 07:00:00 AM
… The Refinance Index decreased 2 percent from the previous week and was 8 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 14 percent lower than the same week one year ago.
“Mortgage application activity fell for the second week in a row, reaching the lowest level since the
beginning of 2020. Even as mortgage rates declined, with the 30-year fixed rate dropping 5 basis points
to 3.15 percent, both purchase and refinance applications decreased,” said Joel Kan, MBA’s Associate
Vice President of Economic and Industry Forecasting. “Treasury yields have been volatile despite mostly
positive economic news, including last week’s June jobs report, which showed ongoing improvements in
the labor market. However, rates continued to move lower – especially late in the week. The 30-year fixed
rate was 11 basis points lower than the same week a year ago, but many borrowers previously refinanced
at even lower rates. Refinance applications have trended lower than 2020 levels for the past four
Added Kan, “Swift home-price growth across much of the country, driven by insufficient housing supply, is
weighing on the purchase market and is pushing average loan amounts higher.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($548,250 or less) decreased to 3.15 percent from 3.20 percent, with points decreasing to 0.38 from 0.39
(including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The first graph shows the refinance index since 1990.
With low rates, the index remains elevated, but has been declining recently.
The second graph shows the MBA mortgage purchase index
Note: The year ago comparisons for the unadjusted purchase index are now difficult since purchase activity picked up in late May 2020.