Mortgage applications decreased 4.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 21, 2021.
… The Refinance Index decreased 7 percent from the previous week and was 9 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 4 percent lower than the same week one year ago.
“Mortgage applications decreased last week as mortgage rates increased to 3.18 percent. Refinances dropped 7 percent as a result, driven by declines in both conventional and government refinance activity,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase applications increased for the second time in three weeks, rebounding after a rather weak April with mostly weekly declines. While purchase activity was around 4 percent lower than a year ago, the comparison is to last spring’s large upswing in activity as pandemic-related lockdowns lifted. Demand is robust throughout the country, but homebuyers continue to be held back by the lack of homes for sale and rapidly increasing home prices.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.18 percent from 3.15 percent, with points decreasing to 0.35 from 0.36 (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 below recent levels since mortgage rates have moved up from the record lows.
The second graph shows the MBA mortgage purchase index
Note: The year ago comparisons for the unadjusted purchase index are now more difficult since purchase activity picked up in late May 2020.