MBA Weekly Applications Survey Sept. 1, 2021: Refis Down, Purchases Up

With refinance applications and purchase applications moving in different directions, overall mortgage application activity fell last week as interest rates held steady, the Mortgage Bankers Association reported Wednesday in its Weekly Applications Survey for the week ending Aug. 27.

The Market Composite Index decreased by 2.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased by 3 percent from the previous week. 

The unadjusted Refinance Index decreased by 4 percent from the previous week but was 2 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 66.8 percent of total applications from 67.3 percent the previous week.

The seasonally adjusted Purchase Index increased by 1 percent from one week earlier. The unadjusted Purchase Index decreased by 2 percent from the previous week and was 16 percent lower than the same week one year ago.

The FHA share of total applications increased to 11.2 percent from 11.0 percent the week prior. The VA share of total applications decreased to 9.7 percent from 10.0 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.

“Despite low rates, refinance applications declined, with some borrowers still waiting for rates to drop even lower,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Recent uncertainty around the economy and pandemic have kept rates low over the past month, which is why the refinance index has oscillated around these levels.”

Kan noted even with a slight increase, purchase activity hit its highest level since early July, as applications for conventional and government loans increased. “Home purchase activity continues to be dominated by higher price tiers of the market, with the purchase average loan size now at $396,500, the highest average in five weeks,” he said.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) remained unchanged at 3.03 percent, with points increasing to 0.34 from 0.29 (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) remained unchanged at 3.13 percent, with points unchanged at 0.26 (including origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by FHA decreased to 3.09 percent from 3.10 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 15-year fixed-rate mortgages increased to 2.39 percent from 2.38 percent, with points increasing to 0.30 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 increased to 2.80 percent from 2.68 percent, with points decreasing to 0.13 from 0.24 (including origination fee) for 80 percent LTV loans.  The effective rate increased 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.