Weekly Mortgage Applications Bounce Back, Rates Hit New Record Low

Weekly Mortgage Applications Bounce Back, Rates Hit New Record Low

April 29, 2020
Mortgage rates wood cutout, pen and calculator. Credit: iStock.com/designer491
Homebuyers are beginning to shake off their fears and are slowly stepping back in the market, as new data from the Mortgage Bankers Association's Weekly Mortgage Applications Survey shows. Purchase applications have increased 12% over the last week. Total mortgage applications were down from last week due to a 7% decrease in refinance applications, though, refinance applications are higher year over year.
"Contributing to the uptick in purchase applications was that mortgage rates fell to another record low in MBA's survey, with the 30-year fixed rate decreasing to 3.43%," said Joel Kan, MBA's associate vice president of economic and industry forecasting. "However, refinance activity declined 7%, as rates for refinances likely remained higher than those for purchase loans. Lenders are still working through pipelines at capacity, and observed changes in credit availability for refinance loans have also in turn impacted rates."
The refinance share of activity is now down to 71.6% of total applications from 75.4% the previous week. The FHA share of total applications is up to 11.5% from 10.3% last week and the VA share of total applications decreased from 13.8% last week to 13.3%. 
Meanwhile, the average rate for a 30-year fixed-rate mortgage with conforming loan balances decreased to 3.43% from 3.45%. The average contract interest rate for a 15-year fixed-rate mortgage also dipped from 3.03% to 2.98%.
Earlier this week, the MBA's Forbearance and Call Volume Survey, a weekly report on the total number of loans now in forbearance, increased to 6.99% from 5.95% of servicers’ portfolio volume in the prior week.