MBA Weekly Applications Survey Apr. 14, 2021: 5th Straight Week of Declines

Mortgage applications again fell across the board from one week earlier, marking the fifth consecutive week of declines, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending April 9. 

The Market Composite Index fell by 3.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 3 percent compared to the previous week. 

The unadjusted Refinance Index decreased by 5 percent from the previous week and was 31 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 59.2 percent of total applications from 60.3 percent the previous week.

The seasonally adjusted Purchase Index decreased by 1 percent from one week earlier. The unadjusted Purchase Index decreased by 1 percent compared to the previous week but was 51 percent higher than the same week one year ago.

The FHA share of total applications increased to 10.8 percent from 10.2 percent the week prior. The VA share of total applications decreased to 12.1 percent from 13.8 percent the week prior. The USDA share of total applications decreased to 0.4 percent from 0.5 percent the week prior.

“Purchase and refinance applications declined, with most of the pullback coming earlier in the week when rates were higher,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Treasury yields started last week high – close to the prior week’s level at over 1.7 percent – before decreasing 6 basis points.”

Kan noted refinance activity has now decreased for nine of the past 10 weeks, as rates have gone from 2.92 percent to 3.27 percent over the same period. “Last week’s index level was the lowest in over a year, as mortgage rates continue to trend higher,” he said. “Many borrowers have either already refinanced at lower rates or are unwilling – or unable – to refinance at current rates.”

Kan also noted the third straight week of declining purchase activity “is a sign that rising home prices and tight supply is constraining home sales – especially in the lower price tiers. Purchase applications were still above last year’s pandemic-impacted low point, but fell behind the level of activity seen the same week in 2019.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.27 percent from 3.36 percent, with points decreasing to 0.33 from 0.43 (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 $548,250) decreased to 3.35 percent from 3.41 percent, with points decreasing to 0.34 from 0.41 (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 3.24 percent from 3.36 percent, with points increasing to 0.40 from 0.36 (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 2.67 percent from 2.74 percent, with points increasing to 0.44 from 0.32 (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 2.60 percent from 2.92 percent, with points decreasing to 0.37 from 0.46 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity decreased to 3.6 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.