MBA Weekly Applications Survey Apr. 7, 2021: 4th Straight Week of Declines

It’s been a familiar pattern for the past month: rising interest rates put a damper on mortgage applications activity for the fourth straight week, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending April 2. 

The Market Composite Index decreased by 5.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 5 percent compared to the previous week. 

The unadjusted Refinance Index decreased by 5 percent from the previous week and was 20 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 60.3 percent of total applications from 60.6 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 51 percent higher than the same week one year ago.

The FHA share of total applications decreased to 10.2 percent from 11.3 percent the week prior. The VA share of total applications increased to 13.8 percent from 10.3 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.

“The return of rates to the highest level since last June contributed to a slowdown in applications for both
purchases and refinances,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “The rapidly recovering economy and improving job market is generating sizeable home buying demand, but activity in recent weeks is constrained by quicker home-price growth and extremely low inventory. Refinance applications declined for the fifth straight week, but there was a gain in VA loan activity. Overall, refinance demand has decreased, with volume over the past 10 weeks down by more than 30 percent.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.36 percent from 3.33 percent, with points increasing to 0.43 from 0.39 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) increased to 3.41 percent from 3.34 percent, with points increasing to 0.41 from 0.31 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by FHA increased to 3.36 percent from 3.29 percent, with points increasing to 0.36 from 0.34 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 2.74 percent from 2.71 percent, with points decreasing to 0.32 from 0.33 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 adjustable-rate mortgages increased to 2.92 percent from 2.85 percent, with points increasing to 0.46 from 0.40 (including origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The ARM share of activity increased to 3.7 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.