Residential Real Estate News
U.S. Mortgage Applications Increase in Late July
According to the Mortgage Bankers Association's latest Weekly Mortgage Applications Survey for the week ending July 23, 2021, U.S. mortgage applications increased 5.7 percent from one week earlier.
The Market Composite Index, a measure of mortgage loan application volume, increased 5.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6 percent compared with the previous week. The Refinance Index increased 9 percent from the previous week and was 10 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 18 percent lower than the same week one year ago.
"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. 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," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "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."
Added Kan, "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. 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 refinance share of mortgage activity increased to 67.2 percent of total applications from 64.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.6 percent of total applications.
The FHA share of total applications decreased to 9.1 percent from 9.6 percent the week prior. The VA share of total applications decreased to 9.8 percent from 10.5 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.01 percent from 3.11 percent, with points decreasing to 0.34 from 0.43 (including the origination fee) for 80 percent 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) decreased to 3.11 percent from 3.13 percent, with points decreasing to 0.27 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.03 percent from 3.08 percent, with points increasing to 0.35 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.36 percent, the lowest level in the history of the survey, from 2.46 percent, with points unchanged at 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs increased to 2.81 percent from 2.74 percent, with points increasing to 0.23 from 0.19 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
