MBA Weekly Applications Survey Sept. 15, 2021: Refis Rebound; Purchase Applications Highest in 5 Months

After laying low for a while, refinance applications came roaring back last week, while purchase applications reached their highest level since April, the Mortgage Bankers Association reported Wednesday in its Weekly Mortgage Applications Survey for the week ending September 17.

The previous week’s results included an adjustment for the Labor Day holiday.

The Market Composite Index increased by 4.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased by 16 percent from the previous week.

The unadjusted Refinance Index increased by 7 percent from the previous week but was 5 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 66.2 percent of total applications from 64.9 percent the previous week.

The seasonally adjusted Purchase Index increased by 2 percent from one week earlier. The unadjusted Purchase Index increased by 12 percent from the previous week but was 13 percent lower than the same week one year ago.

“There was a resurgence in mortgage applications the week after Labor Day, with activity overall at its highest level in over a month, and purchase applications jumping to a high last seen in April 2021,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Housing demand is strong heading into the fall, despite fast-rising home prices and low inventory. The inventory situation is improving, with more new homes under construction and more homeowners listing their home for sale. Despite this week’s increase, purchase applications were still 13 percent lower than the same week a year ago.”

Kan noted homeowners acted while rates remained low. This week’s refinance gain of 7 percent was driven heavily by an increase in FHA and VA applications,” he said.

The FHA share of total applications increased to 11.5 percent from 9.9 percent the week prior. The VA share of total applications increased to 10.4 percent from 10.2 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.

MBA reported the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) held steady at 3.03 percent, with points decreasing to 0.30 from 0.32 (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 3.11 percent from 3.13 percent, with points increasing to 0.25 from 0.21 (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 increased to 3.07 percent from 3.04 percent, with points decreasing to 0.25 from 0.27 (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 remained unchanged at 2.34 percent, with points decreasing to 0.24 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 2.51 percent from 2.68 percent, with points increasing to 0.12 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 2.9 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.