Refinance Index Is Up 67% YoY

Mortgage applications saw a 0.5% decrease this week, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey. However, the report pointed out that the Refinance Index is 67% higher in the previous week than for that same well in 2019.

"Mortgage application activity was mixed last week, despite the 30-year fixed rate decreasing to 2.98 percent - an all-time MBA survey low. The refinance index climbed to its highest level since August, led by a 1.5 percent increase in conventional refinances," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "The purchase market continued its recent slump, with the index decreasing for the sixth time in seven weeks to its lowest level since May 2020. Homebuyer demand is still strong overall, and activity was up 16.5 percent from a year ago. However, inadequate housing supply is putting upward pressure on home prices and is impacting affordability - especially for first-time buyers and lower-income buyers. The trend in larger average loan application sizes and growth in loan amounts points to the continued rise in home prices, as well as the strength in the upper end of the market."

The refinance share of mortgage activity increased to 70% of total applications from 68.7% the previous week. The adjustable-rate mortgage share of activity dipped to 2% of total applications, the FHA share decreased to 10.6%, the VA share increased to 12.6% from 12.2% the prior week and the USDA share decreased to 0.4%.