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Refinance Applications Jump As Mortgage Rates Decline

Katie Jensen
Jul 28, 2021

Mortgage applications increase 5.7% according to Mortgage Banker Association’s (MBA) Weekly Mortgage Application Survey for the week ending on July 23, 2021. 

KEY TAKEAWAYS
  • Mortgage applications increased 5.7% for the week ending on July 23, 2021. 
  • Refinance applications jumped, as the 30-year fixed mortgage rate declined to its lowest level since February 2021.
  • Refinance share of mortgage activity increased to 67.2% of total applications from 64.9% the previous week.
  • The purchase index decreased for the second week in a row to its lowest level since May 2020.

Mortgage applications increased 5.7% according to Mortgage Banker Association’s (MBA) Weekly Mortgage Application Survey for the week ending on July 23, 2021. 

"The 10-year Treasury yield fell last week, as investors grew concerned about increasing COVID-19 case counts and the downside risks to the current economic recovery,” said Joel Kan, MBA's associate vice president of economic and industry forecasting. “Refinance applications jumped, as the 30-year fixed mortgage rate declined to its lowest level since February 2021, and the 15-year rate fell to another record low dating back to 1990.” 

The refinance share of mortgage activity increased to 67.2% of total applications from 64.9% the previous week. Kan said, “Refinances for conventional loans increased over 11%. With over 95% of refinance applications for fixed rate mortgages, borrowers are looking to secure a lower rate for the life of their loan."

The adjustable-rate mortgage (ARM) share of mortgage activity increased to 3.6% of total applications. The FHA share of total applications decreased to 9.1% from 9.6% the previous week. The VA share of total applications decreased to 9.8% from 10.5% the previous week. The USDA share of total applications remained at 0.5% compared to the week prior. 

“The purchase index decreased for the second week in a row to its lowest level since May 2020, and has now declined on an annual basis for the past three months.” Kan added. “Potential buyers continue to be put off by extremely high home prices and increased competition. The FHFA reported yesterday that May home prices were 18% higher than a year ago, continuing a seven-month trend of unprecedented home-price growth.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 3.01%  from 3.11%, with points decreasing to 0.34 from 0.43 for 80% LTV loans. 

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances decreased to 3.11% from 3.13%, with points decreasing to 0.27 from 0.32 for 80% LTV loans. For 30-year fixed-rate mortgages backed by the FHA, contract interest rates decreased to 3.03% from 3.08%, with points increasing to 0.35 from 0.31 for 80% LTV loans. 

For more information on the MBA Weekly Mortgage Application Survey, please visit www.mba.org/WeeklyApps

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