by Calculated Risk on 7/28/2021 07:00:00 AM
… The Refinance Index increased 9 percent from the previous
week and was 10 percent lower than the same week one year ago. The seasonally adjusted Purchase
Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent
compared with the previous week and was 18 percent lower than the same week one year ago.
“The 10-year Treasury yield fell last week, as investors grew concerned about increasing COVID-19 case
counts and the downside risks to the current economic recovery. Refinance applications jumped, as the
30-year fixed mortgage rate declined to its lowest level since February 2021, and the 15-year rate fell to
another record low dating back to 1990,” said Joel Kan, MBA’s Associate Vice President of Economic and
Industry Forecasting. “Refinances for conventional loans increased over 11%. With over 95% of refinance
applications for fixed rate mortgages, borrowers are looking to secure a lower rate for the life of their
Added Kan, “The purchase index decreased for the second week in a row to its lowest level since May
2020, and has now declined on an annual basis for the past three months. Potential buyers continue to
be put off by extremely high home prices and increased competition. The FHFA reported yesterday that
May home prices were 18% higher than a year ago, continuing a seven-month trend of unprecedented
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater
than $548,250) decreased to 3.11 percent from 3.13 percent, with points decreasing to 0.27 from 0.32
(including the origination fee) for 80 percent LTV loans.
The first graph shows the refinance index since 1990.
With low rates, the index remains elevated, and increased this week as rates declined.
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.