The Mortgage Bankers Association's Weekly Mortgage Application Survey reported a small 0.5% increase in mortgage applications for the week ending Feb. 26, 2021. On an unadjusted basis, the Market Composite Index increased 2%.
Meanwhile, the Refinance Index increased 0.1% from the previous week but was still 7% higher year-over-year. The seasonally adjusted Purchase Index increased by 2% and 5% on an unadjusted basis.
"Mortgage rates jumped last week on market expectations of stronger economic growth and higher inflation. The 30-year fixed-rate experienced its largest single-week increase in almost a year, reaching 3.23% - the highest since July 2020," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "The overall share of refinances declined for the fourth consecutive week, and conventional refinance applications fell more than 2% to the lowest level in four months. Government refinance applications historically lag the more rate-sensitive movements of conventional applications, and that was true last week, as both FHA and VA refinancing volumes increased."
"The housing market is entering the busy spring buying season with strong demand. Purchase applications increased, with a rise in government applications - likely first-time buyers - pulling down the average loan size for the first time in six weeks," added Kan.
Additionally, the refinance share of mortgage activity decreased from 68.5% to 67.5% and the adjustable-rate mortgage share of activity increased to 2.9% of total applications.
The FHA share of total applications increased 12.1% from 11.2% the previous week, the VA share increased to 12.3% from 11.9% and the USDA share total applications increased slightly from 0.3% to 0.4%.
Click here to read more from the MBA's WMAS.
