MBA Weekly Applications Survey May 5, 2021: Activity Down 2nd Straight Week

Mortgage applications fell overall from one week earlier as interest rates inched up, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending April 30. 

The Market Composite Index decreased by 0.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 1 percent compared to the previous week. 

The unadjusted Refinance Index increased by 0.1 percent from the previous week but was 17 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 61.0 percent of total applications from 60.6 percent the previous week.

The seasonally adjusted Purchase Index decreased by 3 percent from one week earlier. The unadjusted Purchase Index decreased by 2 percent compared to the previous week but was 24 percent higher than the same week one year ago.

The FHA share of total applications decreased to 10.1 percent from 10.7 percent the week prior. The VA share of total applications decreased to 11.9 percent from 12.2 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior.

“There was a mixed bag of action in the mortgage market last week,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Mortgage rates were slightly higher, refinance applications were essentially unchanged and purchase applications fell for the second straight week. Both conventional and government purchase applications declined, but average loan sizes increased for each loan type. This is a sign that the competitive purchase market, driven by low housing inventory and high demand, is pushing prices higher and weighing down on activity. The higher prices are also affecting the mix of activity, with stronger growth in purchase loans with larger-than-average balances.”

MBA said 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 3.17 percent, with points increasing to 0.34 from 0.30 (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 3.31 percent from 3.28 percent, with points decreasing to 0.27 from 0.30 (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 3.13 percent from 3.12 percent, with points decreasing to 0.22 from 0.24 (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 2.54 percent from 2.55 percent, with points increasing to 0.31 from 0.30 (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 2.76 percent from 2.59 percent, with points decreasing to 0.23 from 0.47 (including origination fee) for 80 percent LTV loans. The effective rate increased 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.