Mortgage applications decreased 4% from one week earlier, according to the latest MBA Weekly Survey ending on May 28, 2021. The Market Composite Index shows mortgage loan application volume fell 4% on a seasonally adjusted basis and 5% on an unadjusted basis from the previous week.
“Mortgage applications decreased for the second week in a row, with the overall index reaching its lowest level since February 2020," said Joel Kan, MBA's associate vice president of economic and industry forecasting. “Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continue to hold back purchase activity. The government purchase index declined to its lowest level in over a year and has now decreased year-over-year for five straight weeks. Purchase applications were down almost 2 percent from a year ago, but that was compared to the week of Memorial Day 2020."
The Refinance Index decreased 5% from the previous week, but was 6% higher than the same week last year. The Purchase Index decreased 3% from last week, or 5% on an unadjusted basis, which is 2% lower than volume was last year.
“Refinance activity dropped for the second straight week, even as the 30-year fixed rate decreased slightly to 3.17 percent,” added Kan. “Even though rates have been below 3.20 percent over the past month, they are still around 20-30 basis points higher than the record lows in late 2020."
The refinance share of mortgage activity decreased to 61.3% of total applications from 61.4% the previous week. Additionally, the adjustable-rate mortgage (ARM) share of activity declined to 3.7% of total applications. The FHA share of total applications increased to 9.6% from 9.1% the week prior. The VA’s share of applications dropped to 10.9% from 11.2% the week prior, and the USDA’s share of applications remained at 0.4%.
The MBA Weekly Survey covers over 75% of all U.S. retail residential mortgage applications. To read more from the survey, click here.
