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The Mortgage Bankers Association's Weekly Mortgage Application Survey reported a 0.9% decrease in mortgage applications for the week ending April 30, 2021. According to the report, extensive demand and rising home prices are causing activity to slip.
The MBA's WMAS reported that the Refinance Index increased by 0.1% from the previous week and was 17% lower year-over-year. Meanwhile, the seasonally adjusted Purchase Index decreased 3% from the previous week and decreased 2% on an unadjusted basis. Purchases were 24% high year-over-year.
"There was a mixed bag of action in the mortgage market last week. Mortgage rates were slightly higher, refinance applications were essentially unchanged, and purchase applications fell for the second straight week," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "Both conventional and government purchase applications declined, but average loan sizes increased for each loan type. This is a sign that the competitive purchase market, driven by low housing inventory and high demand, is pushing prices higher and weighing down on activity. The higher prices are also affecting the mix of activity, with stronger growth in purchase loans with larger-than-average balances."
"An increase in conventional refinances was offset by a decline in government refinances. The 30-year fixed-rate was up slightly to 3.18 percent, which is still 22 basis points lower than a year ago, but higher than it was between mid-2020 and February 2021."
The refinance share of mortgage activity increased to 61% of total applications, the adjustable-rate mortgage share of activity increased to 3.9% of total applications and the FHA share of total applications decreased to 10.1%. Meanwhile, the VA share of total applications decreased to 11.9% from 12.2% the week prior and the USDA share of total applications remained unchanged at 0.4%.
Click here to read more from the MBA's WMAS.