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MBA: Mortgage Applications Increase in Latest Weekly Survey


by Calculated Risk on 10/13/2021 07:00:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 0.2 percent from one
week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage
Applications Survey for the week ending October 8, 2021.

… The Refinance Index decreased 1 percent from the previous
week and was 16 percent lower than the same week one year ago. The seasonally adjusted Purchase
Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 2 percent
compared with the previous week and was 10 percent lower than the same week one year ago.

“Mortgage rates reached their highest level since June 2021, but application activity changed little this
week. An increase in home purchase applications offset a slight decline in refinances,” said Joel Kan,
MBA’s Associate Vice President of Economic and Industry Forecasting. “The increase in purchase
applications was welcome news, but was primarily driven by a 2 percent gain in conventional purchase
applications, which kept the average loan size elevated.”

Added Kan, “The 30-year fixed rate reached 3.18 percent last week and has risen 15 basis points over
the past month, resulting in an 11 percent drop in refinance applications during this time. Government
refinance applications fell over 3 percent last week, driven by a decline in FHA refinances and an 8-basis point increase in the average FHA mortgage rate. We continue to expect weakening refinance activity as
rates move higher and borrowers see less of a rate incentive.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($548,250 or less) increased to 3.18 percent from 3.14 percent, with points increasing to 0.37 from 0.35
(including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

emphasis added

Click on graph for larger image.

The first graph shows the refinance index since 1990.

With low rates, the index remains elevated – but the recent bump in rates has slowed activity.

The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 10% year-over-year unadjusted.

Note: The year ago comparisons for the unadjusted purchase index are now difficult since purchase activity was strong in the second half of 2020.

Note: Red is a four-week average (blue is weekly).

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