MBA Weekly Applications Survey Dec. 8, 2021: Rates Drop; Refis Up
Mortgage interest rates fell for the first time in four weeks, sparking an uptick in refinance activity, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending December 3.
The previous week’s results included an adjustment for the Thanksgiving holiday.
The Market Composite Index increased by 2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 45 percent from the previous week.
The unadjusted Refinance Index increased by 9 percent from the previous week but was 37 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 63.9 percent of total applications from 59.4 percent the previous week.
The seasonally adjusted Purchase Index decreased by 5 percent from one week earlier. The unadjusted Purchase Index increased by 28 percent from the previous week and was 8 percent lower than the same week one year ago.
The FHA share of total applications increased to 9.9 percent from 8.9 percent the week prior. The VA share of total applications increased to 10.7 percent from 10.0 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.
“Mortgage rates declined for the first time in a month, prompting a pickup in refinancing, with government refinances increasing more than 20 percent over the week,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “While the 30-year fixed mortgage rate and 15-year fixed mortgage rate both declined only one basis point, the FHA rate fell 7 basis points, driving the surge in government refinances. Borrowers are continuing to act on these opportunities, but if rates trend higher as MBA is forecasting, the window of opportunity to refinance will continue to get smaller.”
Kan noted the purchase market was slower last week, with applications falling after four consecutive increases. “Activity is still close to the highest level since March 2021, which is a positive sign as the year comes to an end,” he said. “Purchase activity continues to be constrained by a lack of inventory, combined with rapid rates of home-price appreciation and mortgage rates higher than in 2020.”
MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.30 percent from 3.31 percent, with points decreasing to 0.39 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) increased to 3.33 percent from 3.27 percent, with points decreasing to 0.30 from 0.35 (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 decreased to 3.35 percent from 3.42 percent, with points decreasing to 0.32 from 0.35 (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 2.62 percent from 2.63 percent, with points unchanged at 0.31 (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 2.98 percent from 2.48 percent, with points decreasing to 0.21 from 0.27 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The ARM share of activity decreased to 3.0 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.
