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- 30-year mortgage rates fell below 3% in survey for the first time since February
- Rate dip presents opportunity for refinancing
Mortgage applications fell 1.7% from a week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 30, 2021.
The survey covers more than 75 percent of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. The base period and value for all indexes is March 16, 1990=100.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.7% on a seasonally adjusted basis from the previous week. On an unadjusted basis, the Index fell 2% compared with a week earlier.
The Refinance Index fell 2% from the previous week and was 3% lower than the same week last year. The seasonally adjusted Purchase Index decreased 2% from the previous week. The unadjusted Purchase Index decreased 2% compared with the previous week and was 18% lower than the same week last year.
"Interest rates drifted lower globally last week, as markets assessed the latest concerns regarding the delta variant," said Mike Fratantoni, MBA's senior vice president and chief economist. "Thirty-year mortgage rates dropped below 3% in our survey for the first time since this February, presenting an opportunity for many homeowners who have not yet refinanced to lower their rate and their payments."
Fratantoni noted that the refinance application volume "slightly decreased, following an 11% jump last week. Purchase application volume decreased again, reflecting the ongoing lack of inventory that continues to drive rapid home-price appreciation across the country."
The refinance share of mortgage activity increased to 67.6% of total applications from 67.5% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 3.4% of total applications.
The FHA share of total applications remained unchanged from 9% the week prior. The VA share of total applications increased to 9.9% from 9.7% the week prior. The USDA share of total applications remained unchanged from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 2.97% from 3.01%, with points decreasing to 0.33 from 0.34 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) ticked up slightly to 3.12% from 3.11% , with points increasing to 0.30 from 0.27 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
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