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The Mortgage Bankers Association's Weekly Mortgage Applications Survey reported a 4.1% decline in mortgage applications for the week ending Feb. 5, 2021. On an unadjusted basis, mortgage applications decreased by 3%.
Meanwhile, the Refinance Index decreased 4% from the previous week but remained 46% higher year-over-year. The seasonally adjusted Purchase Index decreased 5% from the previous week. On an unadjusted basis, the Purchase Index increased 2% and was 17% higher year-over-year.
"Mortgage rates have increased in four of the first six weeks of 2021, with jumbo rates being the only loan type that saw a decline last week. Despite some weekly volatility, Treasury rates have been driven higher by expectations of faster economic growth as the COVID-19 vaccine rollout continues," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "With the 30-year fixed rate increasing to 2.96% - a high not seen since last November - refinances declined, and their share of total applications dipped to the lowest level in three months. Government refinance applications did buck the trend and increase, and overall activity was still 46% higher than a year ago. Demand for refinances is still very strong this winter."
"Purchase applications cooled the first week of February, but homebuyers are still very active. Purchase activity was 17% higher than last year, and the average purchase loan size continued to increase, reaching another survey high of $402,200, as the higher-priced segment of the market continues to perform well," added Kan.
The refinance share of mortgage activity decreased to 70.2% from 71.4% the previous week. The adjustable-rate mortgage of activity increased to 2.3% of total applications, according to the report.
Additionally, the FHA share of total applications increased from 9.1% to 9.5%, the VA share increased from 12.1% to 13.3% and the USDA share of total applications remained stagnant at 0.4%.
Click here to read more from the MBA's WMAS.