Mortgage Applications Increase in MBA Weekly Survey
Rates dropped; mortgage applicants pounced; and that’s pretty much the story, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending January 29.
The Market Composite Index increased by 8.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 10 percent compared to the previous week.
The unadjusted Refinance Index increased by 11 percent from the previous week to its highest level since last March and was 59 percent higher than the same week one year ago. The refinance share of mortgage activity increased to 71.4 percent of total applications from 70.7 percent the previous week.
The seasonally adjusted Purchase Index increased by 0.1 percent from one week earlier. The unadjusted Purchase Index increased by 8 percent compared to the previous week and was 16 percent higher than the same week one year ago.
“After increasing for three consecutive weeks, the 30-year fixed mortgage rate dropped 3 basis points to 2.92 percent,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “The one-week reversal in the recent upswing in rates drove an increase in both conventional and government refinance activity, as borrowers continue to lock in these historically low rates.”
Kan noted average purchase loan amounts in early 2021 continued to rise across all loan types, driven by a strong pace of home sales, tight housing inventory and high home price growth. “Conventional, FHA and VA purchase loan sizes all set new survey records last week,” he said.
MBA reported the FHA share of total applications decreased to 9.1 percent from 9.4 percent the week prior. The VA share of total applications decreased to 12.1 percent from 12.4 percent the week prior. The USDA share of total applications decreased to 0.4 percent from 0.5 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 2.92 percent from 2.95 percent, with points remaining unchanged at 0.32 (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 $510,400) decreased to 3.12 percent from 3.17 percent, with points increasing to 0.32 from 0.31 (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 increased to 2.94 percent from 2.88 percent, with points decreasing to 0.29 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 2.44 percent from 2.43 percent, with points remaining unchanged at 0.32 (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 2.88 percent from 2.60 percent, with points increasing to 0.46 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The ARM share of activity remained unchanged at 2.2 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.
