MBA Weekly Applications Survey June 30, 2021: Apps Fall to Near 18-Month Low

Mortgage applications fell to their lowest level in nearly a year and a half amid volatile interest rate activity, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the week ending June 25. 

The Market Composite Index decreased by 6.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 7 percent compared to the previous week. 

The unadjusted Refinance Index decreased by 8 percent from the previous week and was 15 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 61.9 percent of total applications from 62.5 percent the previous week.

The seasonally adjusted Purchase Index decreased by 5 percent from one week earlier. The unadjusted Purchase Index decreased by 6 percent compared to the previous week and was 17 percent lower than the same week one year ago.

The FHA share of total applications remained unchanged from 9.5 percent the week prior. The VA share of total applications decreased to 10.5 percent from 11.2 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.

“Mortgage rates were volatile last week, as investors tried to gauge upcoming moves by the Federal Reserve amidst several divergent signals, including rising inflation, mixed job market data, strong consumer spending and a supply-constrained housing market that has led to rapid home-price growth,” said MBA Chief Economist Mike Fratantoni. “Purchase applications for conventional loans declined last week to the lowest level since last May. The average loan size for total purchase applications increased, indicating that first-time homebuyers, who typically get smaller loans, are likely getting squeezed out of the market due to the lack of entry-level homes for sale.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.20 percent from 3.18 percent, with points decreasing to 0.39 from 0.48 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.23 percent from 3.26 percent, with points decreasing to 0.33 from 0.44 (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 3.19 percent from 3.21 percent, with points unchanged at 0.34 (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 2.56 percent from 2.58 percent, with points decreasing to 0.37 from 0.39 (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 2.69 percent, with points decreasing to 0.23 from 0.26 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 3.6 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.