Mortgage Apps Are Down 5 Percent

The Mortgage Bankers Association's Weekly Mortgage Applications Survey reported a 5.1% decline in mortgage applications for the week ending Feb. 12, 2021. On an unadjusted basis, the Market Composite Index decreased by 4%.

The Refinance Index reportedly decreased by 5% as well, however, it was still 51% higher than the same period in 2020. Meanwhile, the seasonally adjusted Purchase Index fell 6% and the unadjusted Purchase Index decreased by 1% and was 15% higher than the same period in 2020.

"Expectations of faster economic growth and inflation continue to push Treasury yields and mortgage rates higher. Since hitting a survey low in December, the 30-year fixed rate has slowly risen, and last week climbed to its highest level since November 2020," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "The uptick in rates has slightly dampened refinance activity, with MBA's index falling for the second week in a row, and the overall share dipping below 70% for the first time since last October."

"The housing market in early 2021 continues to be constrained by low inventory and higher prices. Conventional and government applications to buy a home declined last week, but purchase activity overall is still strong - up 15% from last year. The average purchase loan size hit another survey high at $412,200, partly due to a larger drop in FHA applications, which tend to have smaller-than-average loan sizes."

Additionally, the refinance share of total applications decreased to 69.3% from 70.2% the previous week and the adjustable-rate mortgage share of activity increased to 2.4%. The FHA share of total applications decreased to 9%, the VA share decreased to 13.2% and the USDA share remained stagnant at 0.4%.

Click here to read more from the MBA's WMAS.