MBA Weekly Applications Survey Aug. 11, 2021: Purchase Apps Back on Track

Mortgage applications, led by renewed interest in purchases, increased by nearly 3 percent from one week earlier, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending August 6. 

The Market Composite Index increased by 2.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 3 percent compared to the previous week. 

The unadjusted Refinance Index increased by 3 percent from the previous week but was 8 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 68.0 percent of total applications from 67.6 percent the previous week.

The seasonally adjusted Purchase Index increased by 2 percent from one week earlier. The unadjusted Purchase Index increased by 1 percent compared to the previous week but was 18 percent lower than the same week one year ago.

The FHA share of total applications decreased to 8.9 percent from 9.0 percent the week prior. The VA share of total applications decreased to 9.6 percent from 9.9 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.

“Mortgage applications rebounded last week, including an increase in purchase applications for the first time in nearly a month,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Rates slightly rose but remained below 3 percent, driven by an end-of-week increase in the 10-year Treasury yield following the positive July jobs report.”

Kan said homeowners continue to respond to lower rates, with refinance activity climbing to the highest level since February 2021. “The refinance share of loan counts was at 68 percent, compared to a 63.4 percent share for refinances by dollar volume, as purchase loans continue to see significantly higher loan sizes,” he said. “The higher level of purchase activity last week was driven by more government purchase applications, including a 3.3 percent increase in FHA loans. With low for-sale inventory keeping home price appreciation in many markets at record highs, the jump in FHA purchase applications is potentially a sign that more first-time buyers are finding purchase options despite the high prices.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 2.99 percent from 2.97 percent, with points decreasing to 0.30 from 0.33 (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 3.15 percent from 3.12 percent, with points decreasing to 0.29 from 0.30 (including the 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 decreased to 3.06 percent from 3.08 percent, with points decreasing to 0.27 from 0.29 (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 increased to 2.35 percent from 2.33 percent, with points increasing to 0.25 from 0.23 (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 decreased to 2.52 percent from 2.93 percent, with points decreasing to 0.15 from 0.20 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity decreased to 3.2 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.