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MBA: Mortgage Applications Increase in Latest Weekly Survey

by Calculated Risk on 10/27/2021 07:00:00 AM

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

Mortgage applications increased 0.3 percent from one
week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage
Applications Survey for the week ending October 22, 2021.

… The Refinance Index decreased 2 percent from the previous
week and was 26 percent lower than the same week one year ago. The seasonally adjusted Purchase
Index increased 4 percent from one week earlier. The unadjusted Purchase Index increased 3 percent
compared with the previous week and was 9 percent lower than the same week one year ago.

“”Mortgage rates increased again last week, as the 30-year fixed rate reached 3.30 percent and the 15-
year fixed rate rose to 2.59 percent – the highest for both in eight months. The increase in rates triggered
the fifth straight decrease in refinance activity to the slowest weekly pace since January 2020. Higher
rates continue to reduce borrowers’ incentive to refinance,” said Joel Kan, MBA’s Associate Vice
President of Economic and Industry Forecasting. “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. 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.”

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 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 somewhat elevated – but the recent bump in rates has slowed activity to the lowest level since January 2020.

The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 9% 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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