MBA Weekly Applications Survey Apr. 21, 2021: Borrowers Come Roaring Back
After five weeks of rising interest rates and tepid activity, mortgage applications roared back this week, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending April 16.
The Market Composite Index increased by 8.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 9 percent compared to the previous week.
The unadjusted Refinance Index increased by 10 percent from the previous week but was 23 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 60.0 percent of total applications from 59.2 percent the previous week.
The seasonally adjusted Purchase Index increased by 6 percent from one week earlier. The unadjusted Purchase Index increased by 7 percent compared to the previous week and was 57 percent higher than the same week one year ago.
The FHA share of total applications increased to 11.3 percent from 10.8 percent the week prior. The VA share of total applications decreased to 11.5 percent from 12.1 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior.
“Mortgage rates dropped to their lowest levels in around two months, prompting a small resurgence in refinance activity after six weeks of declines,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Borrowers acted on the decrease in rates for most loan types, with both conventional and government refinance applications showing gains. The spring housing market also saw a boost from lower rates, with purchase applications – driven by a jump in conventional applications – increasing over 5 percent.”
Kan said MBA expects the purchase market to remain strong, with the recovering job market and supportive demographics fueling housing demand in the months ahead. “The average loan size for purchase applications increased after a few weeks of declines, as fewer homes available for sale make for a competitive buying market that is accelerating home-price growth,” he said.
MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.20 percent from 3.27 percent, with points increasing to 0.36 from 0.33 (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 3.34 percent from 3.35 percent, with points decreasing to 0.29 from 0.34 (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 3.15 percent from 3.24 percent, with points decreasing to 0.31 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 2.65 percent from 2.67 percent, with points decreasing to 0.41 from 0.44 (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 increased to 2.67 percent from 2.60 percent, with points increasing to 0.52 from 0.37 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The ARM share of activity remained unchanged at 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.
