With Record-Low Rates, All Signs Move Forward in MBA Weekly Survey
Interest rates fell again last week, and homebuyers took advantage across the board, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending December 11.
The Market Composite Index increased by 1.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 0.4 percent compared to the previous week.
The unadjusted Refinance Index increased by 1 percent from the previous week and was 105 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 72.7 percent of total applications from 72.0 percent the previous week.
The seasonally adjusted Purchase Index increased by 2 percent from one week earlier. The unadjusted Purchase Index decreased by 2 percent compared to the previous week and was 26 percent higher than the same week one year ago.
The FHA share of total applications increased to 11.0 percent from 9.9 percent the week prior. The VA share of total applications decreased to 12.1 percent from 12.7 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior.
“U.S. Treasury rates stayed low last week, in part due to uncertainty over the prospects of additional pandemic-related government stimulus, as well as concerns about the continued rise in COVID-19 cases across the country. Mortgage rates as a result fell to another survey low, with the 30-year fixed mortgage rate dropping five basis points to 2.85 percent,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Homeowners once again acted on the decline in rates, with refinance activity rising for the second straight week and up 105 percent from a year ago.”
Kan said ongoing strength in the housing market has carried into December. “Applications to buy a home increased for the fourth time in five weeks, as both conventional and government segments of the market saw gains. Government purchase applications rose for the sixth straight week to the highest level since June – perhaps a sign that more first-time buyers are entering the market.”
MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to a survey low of 2.85 percent from 2.90 percent, with points decreasing to 0.33 from 0.35 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) decreased to 3.12 percent from 3.20 percent, with points increasing to 0.33 from 0.28 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by FHA decreased to a survey low of 2.96 percent from 2.97 percent, with points increasing to 0.42 from 0.40 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to a survey low of 2.49 percent from 2.51 percent, with points decreasing to 0.29 from 0.35 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 adjustable-rate mortgages decreased to 2.58 percent from 2.60 percent, with points decreasing to 0.36 from 0.40 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The ARM share of activity increased to 1.8 percent of total applications.
The survey covers more than 75 percent of all U.S. retail and consumer direct residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.
Please Note: MBA offices will be closed Thursday, December 24 and will reopen on Monday, January 4, 2021. Due to the holiday, the results for weeks ending December 25 and January 1 will be released on January 6, 2021.
