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MBA: Mortgage Applications Decrease in Latest Weekly Survey

by Calculated Risk on 12/01/2021 07:00:00 AM

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

Mortgage applications decreased 7.2 percent from one
week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage
Applications Survey for the week ending November 26, 2021. This week’s results include an adjustment
for the Thanksgiving holiday.

… The Refinance Index decreased 15 percent from the previous
week and was 41 percent lower than the same week one year ago. The seasonally adjusted Purchase
Index increased 5 percent from one week earlier. The unadjusted Purchase Index decreased 30 percent
compared with the previous week and was 8 percent lower than the same week one year ago.

“Mortgage rates rose for the third week in a row, reducing the refinance incentive for many borrowers.
The 30-year fixed rate hit 3.31 percent – the highest since this April – and led to refinance applications
falling more than 14 percent. Over the past three weeks, rates are up 15 basis points and refinance
activity has declined over 18 percent,” said Joel Kan, MBA’s Associate Vice President of Economic and
Industry Forecasting. “Despite higher mortgage rates, purchase applications had a strong week, mostly
driven by a 6 percent increase in conventional loan applications. Conventional loans tend to be larger
than government loans, and this was evident in the average loan amount, which increased to $414,700 –
the highest since February 2021. As home-price appreciation continues at a double-digit pace, buyers of
newer, pricier homes continue to dominate purchase activity, while the share of first-time buyer activity
remains depressed.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($548,250 or less) increased to 3.31 percent from 3.24 percent, with points increasing to 0.43 from 0.36
(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 relatively low rates, the index remains slightly elevated, but down sharply from last year – and at the lowest level since January 2020.

The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 8% year-over-year unadjusted.

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

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