MBA Weekly Applications Survey June 16, 2021: After 3 Weeks, a Rebound

Mortgage applications rose for the first time in three weeks as key interest rates fell to their lowest level since May, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending June 11. 

The previous week’s results included an adjustment for the Memorial Day holiday.

The Market Composite Index increased by 4.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 15 percent compared to the previous week. 

The unadjusted Refinance Index increased by 6 percent from the previous week but was 22 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 61.7 percent of total applications from 60.4 percent the previous week.

The seasonally adjusted Purchase Index increased by 2 percent from one week earlier. The unadjusted Purchase Index increased by 11 percent compared to the previous week but was 17 percent lower than the same week one year ago.

The FHA share of total applications increased to 9.6 percent from 9.5 percent the week prior. The VA share of total applications increased to 11.5 percent from 11.2 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.

“U.S. Treasury yields have slid because of the uncertainty in the financial markets regarding inflation and how the Federal Reserve may act over the next few months,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Purchase activity also rebounded, even as supply constraints continue to slow the housing market. An almost 5 percent increase in government purchase applications drove most of last week’s gain while also tempering the recent growth in loan sizes. Purchase applications were still down 17 percent from a year ago, which was when the mortgage market started seeing large post-shutdown increases in activity.”

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.11 percent from 3.15 percent, with points increasing to 0.36 from 0.34 (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) decreased to 3.20 percent from 3.29 percent, with points increasing to 0.46 from 0.32 (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 3.14 percent from 3.12 percent, with points decreasing to 0.33 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 decreased to 2.49 percent from 2.52 percent, with points decreasing to 0.25 from 0.29 (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 2.69 percent from 2.54 percent, with points increasing to 0.38 from 0.30 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The ARM share of activity decreased to 3.8 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.