Mortgage applications jumped 16% from one week earlier for the week ending on July 9, 2021, according to the Mortgage Banker Association (MBA) Weekly Mortgage Applications Survey.
"Overall applications climbed last week, driven heavily by increased refinancing as rates dipped again. Treasury yields have trended lower over the past month as investors remained concerned about the COVID-19 variant and slowing economic growth," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.
"Mortgage rates fell for the second consecutive week as a result, with the 30-year fixed rate hitting 3.09 percent, its lowest level since February 2021. Refinance applications increased over 20 percent last week after adjusting for the July 4th holiday, aided by a 23 percent increase in conventional refinance applications. Also, there may have been a delayed spillover of applications from the previous week, when rates also decreased, but there was not much response in terms of refinance applications,” Kan continued.
The Market Composite Index that measures the volume of mortgage loan applications reveals a 16% increase on a seasonally adjusted basis from the previous week. The Index decreased 7% compared to the previous week on an unadjusted basis. The dramatic difference accounts for the 4th of July Holiday.
On July 9, the refinance index shot up 20% from the week prior, but was still 29% lower than the same week last year. The seasonally adjusted purchase index increased 8% from the previous week, and decreased 13% on an unadjusted basis. The purchase index was still 29% lower than the same week a year ago.
"Purchase applications increased last week, but average loan sizes decreased to their lowest level since January 2021. We continue to see ebbs and flows as housing demand remains strong but for-sale inventory remains low. However, lower rates may be helping some home buyers close on their purchases, especially first-time home buyers. The year-over-year comparisons were down significantly for both purchase and refinance applications, as they were relative to a non-holiday week in 2020," Kan added.
The refinance share of mortgage activity increased to 64.1% of total mortgage applications from 61.6% the previous week. The share of adjustable-rate mortgage (ARM) activity increased to 3.5% of total applications.
The average contract interest rate for a 30-year-fixed-rate mortgage with conforming loan balances decreased to 3.09% from 3.15% the previous week, with points decreasing to 0.37 from 0.38 for 80% LTV loans.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA dropped to 3.15% from 3.19% the previous week, with points decreasing to 0.29 from 0.32 for 80% LTV loans. For 30-year fixed-rate mortgages with jumbo loan balances, the average contract interest rate decreased to 3.16% from 3.20%, with points decreasing to 0.27 from 0.28 for 80% LTV loans.
For more information about MBA's Weekly Applications Survey, please visit www.mba.org/WeeklyApps.
