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MBA: Mortgage Applications Increase in Latest Weekly Survey

by Calculated Risk on 8/11/2021 07:00:00 AM

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

Mortgage applications increased 2.8 percent from one
week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage
Applications Survey for the week ending August 6, 2021.

… The Refinance Index increased 3 percent from the previous
week and was 8 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 18 percent lower than the same week one year ago.

“Mortgage applications rebounded last week, including an increase in purchase applications for the first
time in nearly a month. Rates slightly rose but remained below 3 percent, driven by an end-of-week
increase in the 10-year Treasury yield following the positive July jobs report,” said Joel Kan, MBA’s
Associate Vice President of Economic and Industry Forecasting. “Homeowners continue to respond to
lower rates, with refinance activity climbing to the highest level since February 2021. The refinance share
of loan counts was at 68 percent, compared to a 63.4 percent share for refinances by dollar volume, as
purchase loans continue to see significantly higher loan sizes.”

Added Kan, “The higher level of purchase activity last week was driven by more government purchase
applications, including a 3.3 percent increase in FHA loans. With low for-sale inventory keeping home-price appreciation in many markets at record highs, the jump in FHA purchase applications is potentially a
sign that more first-time buyers are finding purchase options despite the high prices.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($548,250 or less) increased to 2.99 percent from 2.97 percent, with points decreasing to 0.30 from 0.33
(including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Mortgage Refinance IndexClick 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

Mortgage Purchase Index
According to the MBA, purchase activity is down 18% 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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