The Mortgage Bankers Association's Weekly Mortgage Application Survey reported an 8.1% increase in mortgage applications for the week ending Jan. 29. 2021.
The report revealed that the Refinance Index increased 11% from the previous week and was 59% higher year-over-year. The seasonally adjusted Purchase Index barely moved at a 0.1% increase from the previous week. On an unadjusted basis, the Purchase Index increased 8% from the previous week and was 16% higher year-over-year.
"After increasing for three consecutive weeks, the 30-year fixed mortgage rate dropped 3 basis points to 2.92%. The one-week reversal in the recent upswing in rates drove an increase in both conventional and government refinance activity, as borrowers continue to lock in these historically low rates. MBA's refinance index hit its highest level since March 2020 and jumped 60% year-over-year," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "Purchase activity was unchanged last week, with a 1 percent increase in conventional applications offset by a 3 percent decline in government applications. Average purchase loan amounts in early 2021 continue to rise across all loan types, driven by a strong pace of home sales, tight housing inventory and high home-price growth. Conventional, FHA and VA purchase loan sizes all set new survey records last week."
Meanwhile, the refinance share of mortgage activity increased from 70.7% to 71.4% and the adjustable-rate mortgage share of activity stayed stagnant at 2.2%. The FHA share of total mortgage applications decreased to 9.1% from 9.4% the previous week, the VA share decreased to 12.1% from 12.4% and the USDA share of total applications decreased to 0.4%
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