MBA Weekly Applications Survey Apr. 28, 2021: Refi Pool Continues to Shrink

Mortgage applications fell from one week earlier amid a volatile spring home buying season, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending April 23. 

The Market Composite Index decreased by 2.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 2 percent compared to the previous week. 

The unadjusted Refinance Index decreased by 1 percent from the previous week and was 18 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 60.6 percent of total applications from 60.0 percent the previous week.

The seasonally adjusted Purchase Index decreased by 5 percent from one week earlier. The unadjusted Purchase Index decreased by 4 percent compared to the previous week but was 34 percent higher than the same week one year ago.

The FHA share of total applications decreased to 10.7 percent from 11.3 percent the week prior. The VA share of total applications increased to 12.2 percent from 11.5 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior.

“Mortgage applications decreased last week, even as mortgage rates dropped for the third week in a row,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Even with a few weeks of lower rates, most borrowers have likely already refinanced, which is why activity has decreased in seven of the last eight weeks. The purchase market’s recent slide comes despite a strengthening economy and labor market. Activity is still above year-ago levels, but accelerating home-price growth and low inventory has led to a decline in purchase applications in four of the last five weeks.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.17 percent from 3.20 percent, with points decreasing to 0.30 from 0.36 (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 3.28 percent from 3.34 percent, with points increasing to 0.30 from 0.29 (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 3.12 percent from 3.15 percent, with points decreasing to 0.24 from 0.31 (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 2.55 percent from 2.65 percent, with points decreasing to 0.30 from 0.41 (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 2.59 percent from 2.67 percent, with points decreasing to 0.47 from 0.52 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity decreased to 3.5 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.