MBA Weekly Applications Survey June 23, 2021: Apps Up Despite Rising Rates

Mortgage applications increased for the second straight week despite rising interest rates, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending June 18. 

The Market Composite Index increased by 2.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 1 percent compared to the previous week. 

The unadjusted Refinance Index increased by 3 percent from the previous week but was 9 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 62.5 percent of total applications from 61.7 percent the previous week.

The seasonally adjusted Purchase Index increased by 1 percent from one week earlier. The unadjusted Purchase Index decreased by 1 percent compared to the previous week and was 14 percent lower than the same week one year ago.

The FHA share of total applications decreased to 9.5 percent from 9.6 percent the week prior. The VA share of total applications decreased to 11.2 percent from 11.5 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.

“Despite the jump in rates, refinances increased for the second consecutive week, pushed higher by a 4 percent bump in conventional refinance applications,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Purchase applications have regained an upward trend over the past few weeks. Activity was slightly higher for the third straight week, but remained lower than the same week a year ago. Government purchase applications drove most of last week’s increase, which also contributed to a slightly lower overall average purchase loan size.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.18 percent from 3.11 percent, with points increasing to 0.48 from 0.36 (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 3.26 percent from 3.20 percent, with points decreasing to 0.44 from 0.46 (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 3.21 percent from 3.14 percent, with points increasing to 0.34 from 0.33 (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 2.58 percent from 2.49 percent, with points increasing to 0.39 from 0.25 (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 remained unchanged at 2.69 percent, with points decreasing to 0.26 from 0.38 (including origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The ARM share of activity increased to 3.9 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.