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The Mortgage Bankers Association's Weekly Mortgage Application Survey reported a 4.2% decrease in mortgage applications for the week ending May 21, 2021. On an unadjusted basis, the Market Composite Index fell by 4%.
"Mortgage applications decreased last week as mortgage rates increased to 3.18%. Refinances dropped 7% as a result, driven by declines in both conventional and government refinance activity," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "Purchase applications increased for the second time in three weeks, rebounding after a rather weak April with mostly weekly declines. While purchase activity was around 4% lower than a year ago, the comparison is to last spring's large upswing in activity as pandemic-related lockdowns lifted. Demand is robust throughout the country, but homebuyers continue to be held back by the lack of homes for sale and rapidly increasing home prices."
According to the MBA's survey, the Refinance Index decreased by 7% and was 9% lower year-over-year. Meanwhile, the seasonally adjusted Purchase Index increased 2%, however, it is down 4% year-over-year.
The refinance share of mortgage activity decreased from 63.3% to 61.4%, the adjustable-rate mortgage share of activity increased to 4% of total applications and the FHA share of total applications decreased slightly to 9.1%. Additionally, the VA share of total applications decreased 11.2% and the USDA share of mortgage activity held stagnant at 0.4%.
Click here to read more from the MBA's WMAS.