Mortgage Applications Up But Refinance Interest Waning
Mortgage applications increased 0.3% from one week earlier for the week ending Oct. 22, 2021. According to the latest data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey, the Market Composite Index, a measure of mortgage loan application volume, increased 0.3% on a seasonally adjusted basis from the previous week.
– Unadjusted, the Index increased 0.2%compared with the previous week.
– The Refinance Index decreased 2% from the previous week—26% lower YoY.
– The seasonally adjusted Purchase Index increased 4% from one week earlier.
– The unadjusted Purchase Index increased 3% from the previous week—9% lower YoY.
– The refinance share of mortgage activity decreased to 62.2% of total.
– The adjustable-rate mortgage (ARM) share of activity decreased to 3.1%.
– The FHA share of total applications increased to 10.4%.
– The VA share of total applications increased to 10.6%.
– The USDA share of total applications remained unchanged from 0.5 percent the week prior.
“Mortgage rates increased again last week, as the 30-year fixed rate reached 3.30% and the 15-year fixed rate rose to 2.59%—the highest for both in eight months. The increase in rates triggered the fifth straight decrease in refinance activity to the slowest weekly pace since January 2020. Higher rates continue to reduce borrowers’ incentive to refinance,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting, in a statement.
“Purchase applications picked up slightly, and the average loan size rose to its highest level in three weeks, as growth in the higher price segments continues to dominate purchase activity,” added Kan. “Both new and existing-home sales last month were at their strongest sales pace since early 2021, but first-time homebuyers are accounting for a declining share of activity. Home prices are still growing at a rapid clip, even if monthly growth rates are showing signs of moderation, and this is constraining sales in many markets, and particularly for first-timers.”
By RISMedia Staff