MBA Weekly Applications Survey Nov. 3, 2021: Refis Fall to Nearly 2-Year Low

Mortgage rates fell last week—but so did mortgage applications, refinance applications in particular, the Mortgage Bankers Association reported in its Weekly Mortgage Applications Survey for the week ending October 29. 

The Market Composite Index decreased by 3.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 4 percent from the previous week. 

The unadjusted Refinance Index decreased by 4 percent from the previous week and was 33 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 61.9 percent of total applications from 62.2 percent the previous week

The seasonally adjusted Purchase Index decreased by 2 percent from one week earlier to its lowest level since January 2020. The unadjusted Purchase Index decreased by 3 percent from the previous week and was 9 percent lower than the same week one year ago.

The FHA share of total applications decreased to 9.2 percent from 10.4 percent the week prior. The VA share of total applications decreased to 9.9 percent from 10.6 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.

“Mortgage rates decreased for the first time since August, as concerns about supply-chain bottlenecks, waning consumer confidence, weaker economic growth and rising inflation pushed Treasury yields lower,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Most of the decline in rates came later in the week, which is likely why refinance applications declined to the lowest level since January 2020, and the overall share of activity fell to the lowest since July 2021. Government refinance applications fell for the sixth straight week, as it becomes evident that an increasing number of borrowers have already refinanced.”

Kan said purchase activity continues to be held back by high prices and low for-sale inventory, but current applications levels still point to healthy housing demand. “MBA is forecasting for a record $1.6 billion in purchase mortgage originations this year, and sustained demand leading to another record year in 2022,” 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 3.24 percent from 3.30 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 3.29 percent from 3.34 percent, with points decreasing to 0.27 from 0.29 (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 3.29 percent from 3.31 percent, with points unchanged at 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 2.58 percent from 2.59 percent, with points decreasing to 0.29 from 0.33 (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 2.88 percent from 2.89 percent, with points decreasing to 0.11 from 0.13 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The ARM share of activity increased to 3.2 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.