According to the latest Mortgage Bankers Association (MBA) Weekly Mortgage Application Survey, on July 2, 2021, mortgage applications fell 1.8% from one week earlier. On an unadjusted basis, mortgage applications fell 2% from one week earlier.
The refinance index decreased 2% from the previous week and fell 8% from last year. The seasonally adjusted purchase index fell 1% from one week earlier, and was 14% lower than last year.
Joel Kan, MBA's associate vice president of economic and industry forecasting, said, “Mortgage application activity fell for the second week in a row, reaching the lowest level since the beginning of 2020. Even as mortgage rates declined, with the 30-year fixed rate dropping 5 basis points to 3.15 percent, both purchase and refinance applications decreased.”
The refinance share of mortgage activity decreased to 61.6% of total applications compared to 61.9% the previous week. The adjustable-rate mortgage (ARM) share of activity also decreased to 3.3% of total applications.
However, the FHA share of mortgage activity increased to 9.8% from 9.5% the previous week. The VA share of total applications increased to 10.8% from 10.5% within the same time period. The USDA share of total applications remained unchanged at 0.5%.
“Treasury yields have been volatile despite mostly positive economic news, including last week's June jobs report, which showed ongoing improvements in the labor market,” Kan continued. “However, rates continued to move lower - especially late in the week. The 30-year fixed rate was 11 basis points lower than the same week a year ago, but many borrowers previously refinanced at even lower rates. Refinance applications have trended lower than 2020 levels for the past four months."
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.15% from 3.20% the previous week. Points decreased to 0.38 from 0.39 for 80% LTV loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.20% from 3.23% the week prior. Points decreased to 0.32 from 0.34 for 80% LTV loans.
"Swift home-price growth across much of the country, driven by insufficient housing supply, is weighing on the purchase market and is pushing average loan amounts higher,” added Kan.
To read more from the MBA's Weekly Applications Survey, please visit www.mba.org/WeeklyApps.
