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The Mortgage Bankers Association's Weekly Mortgage Application Survey for the week ending May 14, 2021, reported a 1.2% increase in mortgage applications from the previous week. The report also highlighted that all loan types have hit their highest levels in two weeks.
The Refinance Index increased 4% from the previous week and was just 2% lower than the same week in 2021. The seasonally adjusted Purchase Index decreased 4% this week but was 2% higher year-over-year.
"Mortgage rates increased last week, with all loan types hitting their highest levels in two weeks. Rates were still lower than levels reported in late March and early April, providing additional opportunity for borrowers to refinance. Despite the 30-year fixed rate rising to 3.15%, applications for conventional and VA refinances increased. Ongoing volatility in refinance applications is likely if rates continue to oscillate around current levels," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "A decline in purchase applications was seen for both conventional and government loans. There continues to be strong demand for buying a home, but persistent supply shortages are constraining purchase activity, and building material shortages and higher costs are making it more difficult to increase supply. As a result, home prices and average purchase loan balances continue to rise, with the average purchase application reaching $411,400 - the highest since February."
Additionally, the refinance share of mortgage activity increased from 61.3% to 63.3% of total applications and the adjustable-rate mortgage share of activity increased to 3.9% of total applications. The FHA share of total applications decreased to 9.2%, the VA share increased slightly to 12% and the USDA share of total applications decreased slightly to 0.4%.
Click here to read more from the MBA's WMAS.