MBA Weekly Applications Survey Oct. 27, 2021: Applications, Rates Up 2nd Straight Week
Mortgage applications rose for the second straight week—but so did interest rates, which reached a nine-month high, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending October 22.
The Market Composite Index increased by 0.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 0.2 percent from the previous week.
The unadjusted Refinance Index decreased by 2 percent from the previous week and was 26 percent lower than the same week one year ago. The refinance share of mortgage activity decreased to 62.2 percent of total applications from 63.3 percent the previous week.
The seasonally adjusted Purchase Index increased by 4 percent from one week earlier. The unadjusted Purchase Index increased by 3 percent from the previous week but was 9 percent lower than the same week one year ago.
The FHA share of total applications increased to 10.4 percent from 10.2 percent the week prior. The VA share of total applications increased to 10.6 percent from 10.4 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.
“The increase in rates triggered the fifth straight decrease in refinance activity to the slowest weekly pace since January 2020,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Higher rates continue to reduce borrowers’ incentive to refinance. Purchase applications picked up slightly, and the average loan size rose to its highest level in three weeks, as growth in the higher price segments continues to dominate purchase activity.”
Kan noted both new and existing home sales last month were at their strongest sales pace since early 2021, “but first-time home buyers are accounting for a declining share of activity. Home prices are still growing at a rapid clip, even if monthly growth rates are showing signs of moderation, and this is constraining sales in many markets, and particularly for first-timers.”
MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.30 percent from 3.23 percent, with points decreasing to 0.34 from 0.35 (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 3.34 percent from 3.26 percent, with points decreasing to 0.29 from 0.33 (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 3.31 percent from 3.17 percent, with points increasing to 0.38 from 0.32 (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 2.59 percent from 2.54 percent, with points increasing to 0.33 from 0.29 (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 decreased to 2.89 percent from 3.09 percent, with points decreasing to 0.13 from 0.30 (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.
