Residential Real Estate News
Mortgage Applications in U.S. Increase in Early October
According to the Mortgage Bankers Association's latest Weekly Mortgage Applications Survey for the week ending October 8, 2021, U.S. mortgage applications increased 0.2 percent from one week earlier.
The Market Composite Index, a measure of mortgage loan application volume, increased 0.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.4 percent compared with the previous week.
The Refinance Index decreased 1 percent from the previous week and was 16 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 10 percent lower than the same week one year ago.
"Mortgage rates reached their highest level since June 2021, but application activity changed little this week. An increase in home purchase applications offset a slight decline in refinances," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "The increase in purchase applications was welcome news, but was primarily driven by a 2 percent gain in conventional purchase applications, which kept the average loan size elevated."
Added Kan, "The 30-year fixed rate reached 3.18 percent last week and has risen 15 basis points over the past month, resulting in an 11 percent drop in refinance applications during this time. Government refinance applications fell over 3 percent last week, driven by a decline in FHA refinances and an 8-basispoint increase in the average FHA mortgage rate. We continue to expect weakening refinance activity as rates move higher and borrowers see less of a rate incentive."
The refinance share of mortgage activity decreased to 63.9 percent of total applications from 64.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 3.4 percent of total applications.
The FHA share of total applications decreased to 10.2 percent from 10.5 percent the week prior. The VA share of total applications decreased to 10.2 percent from 10.3 percent the week prior. The USDA share of total applications decreased to 0.4 percent from 0.5 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.18 percent from 3.14 percent, with points increasing to 0.37 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) increased to 3.22 percent from 3.20 percent, with points increasing to 0.29 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.20 percent from 3.12 percent, with points remaining unchanged at (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 2.48 percent from 2.45 percent, with points increasing to 0.29 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 3.08 percent from 2.54 percent, with points increasing to 0.26 from 0.16 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
