Mortgage Applications Continue to Rise on the Refi Wave

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According to the Mortgage Bankers Association (MBA)mortgage loan applications were down 2.4% from the previous week for the week ending August 27, 2021.

The Composite MBA Market Index was down 2.4% on a seasonally adjusted basis from a week earlier. Unadjusted The index was down 3% from the previous week. The refinancing index was down 4% from the previous week and was 2% higher than the same week a year ago. The seasonally adjusted purchasing index rose 1% from a week earlier. The unadjusted buying index was down 2% from the previous week, but 16% lower than the same week a year ago.

“Last week, mortgage interest rates changed slightly, while the 30-year fixed rate remained at 3.03%. Despite the low rates, the number of refinancing applications has dropped, and some borrowers are still waiting for rates to fall even lower. The recent uncertainty surrounding the economy and the pandemic “has kept rates low over the past month, so the refinancing index has hovered around these levels,” said Joel Kahn, MBA’s vice president of industry forecasting.

The share of refinancing of mortgage activities slightly decreased to 66.8% of the total number of applications from 67.3% in the previous week. The share of adjustable rate mortgage (ARM) transactions increased to 3.2% of total applications.

Despite the fact that rates continue to fluctuate in refinancing-friendly territory, a survey of approximately 1,000 borrowers conducted by Bankrate showed that 74% of individuals with mortgages before the pandemic did not refinance.

Among borrowers who did not refinance, 32% of respondents said they would not save enough money to guarantee refinancing. Closing costs and fees were the second most frequently cited objection, with 27% of respondents citing this as an obstacle.

Depending on the type of investor, the share of FHA in the total number of applications increased slightly to 11.2% from 11% a week earlier. The share of VA in the total number of applications decreased to 9.7% from 10% a week earlier. The share of USDA in the total number of applications increased to 0.5% from 0.4% a week earlier.

“Even with a slight increase, purchasing activity reached its highest level since the beginning of July, as the number of applications for regular and government loans increased,” said Kahn. “Buying activity continues to be dominated by higher market price levels, with an average purchasing power of $ 396,500 now, the highest average in five weeks. According to the FHFA, house prices rose 18.8% in June compared to the same period last year, while in the second quarter the overall growth was 17.4%. Both indicators set new records for housing. demand continued to outstrip the number of homes for sale. “

Redfin recently reported that national average home sales prices rose 16% year-on-year over the four-week period ending August 22, as the proportion of home sellers cutting asking prices each week continues to rise. Redfin found that asking prices for newly-listed homes for sale rose 10% from the same period last year to an average of $ 351,730, the lowest level since mid-April, and are down 2.7% from an all-time high. established in four weeks. period ending June 27.

“As we get closer to the start of the return-to-school season, home prices tend to drop, supply declines, and home sales take longer,” he said. Daryl Fairweather, chief economist at Redfin… “All this is happening very slowly. I don’t think the housing market will return to a completely typical state any time soon, but we are starting to move in that direction. ”



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