MBA Weekly Applications Survey Nov. 10, 2021: Falling Rates Trigger 7% Jump in Refis

Mortgage rates fell for the second straight week, triggering a jump in refinance activity, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending November 5. 

The Market Composite Index increased by 5.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 5 percent from the previous week. 

The unadjusted Refinance Index increased by 7 percent from the previous week but was 28 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 63.5 percent of total applications from 61.9 percent the previous week.

The seasonally adjusted Purchase Index increased by 3 percent from one week earlier. The unadjusted Purchase Index increased by 0.1 percent from the previous week but was 4 percent lower than the same week one year ago.

The FHA share of total applications decreased to 8.8 percent from 9.2 percent the week prior. The VA share of total applications increased to 10.2 percent from 9.9 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.

“Although overall activity remains close to January 2020 lows, homeowners acted on the decrease in rates,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Refinance activity was up 7 percent overall, with gains in both conventional and government refinances. Additionally, the average loan balance for a refinance application was the highest in a month.”

Kan noted purchase applications also showed strength last week, increasing just under 3 percent and down only 4 percent from last year’s pace. “The dip in rates might have helped to bring some buyers back into the market, but housing inventory is still extremely low and price growth remains elevated,” he said.

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.16 percent from 3.24 percent, with points unchanged at 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 3.26 percent from 3.29 percent, with points increasing to 0.32 from 0.27 (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 3.18 percent from 3.29 percent, with points decreasing to 0.31 from 0.38 (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 2.52 percent from 2.58 percent, with points increasing to 0.33 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 decreased to 2.82 percent from 2.88 percent, with points increasing to 0.25 from 0.11 (including origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The ARM share of activity decreased to 3.1 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.