Mortgage Applications Rise As Treasury Yields Fall

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The number of applications for mortgages in the week ended August 20 rose by 1.6%. movement in concert with a drop in Treasury bond yields, according to the latest report Mortgage Bankers Association

The Composite Market Index was up 1% unadjusted from the previous week. Refis shares rose 1% from the previous week and mortgage applications jumped 3%, the trade group said on Wednesday. The shopping index was at its Highest level from the beginning of July, although it is still down 16% over the same period last year.

“Treasury yields fell last week as investors continue to watch with dismay the rise in COVID-19 cases in
economic activity is starting to decline in several states, ”said Joel Kahn. Junior Vice President of the MBA for Economic and Industrial Forecasting. “As a result, mortgage rates decreased slightly,
30-year flat rate declines for the first time in three weeks… Decrease in rates led to an increase in refinancing
applications, while the number of applications for government loans jumped 10 percent to the highest level since May 2021. “

Kang also noted that the number of applications for the purchase of both conventional and government loans increased in the week ending August 20. But the average loan size on mortgage applications has declined, he said:which is potentially a sign that more buyers are looking for lower-priced homes for the first time.
they are helped by the recent increase in the number of homes for sale in both newly built and existing homes. “

The composition of refis has not changed compared to the previous week and amounted to 67.3% of the total number of applications.

According to the MBA, FHA the share of the total number of applications increased to 11% from 9.4% a week earlier. V VA Share this of the total number of applications decreased to 10% from 10.3% a week earlier. V USDA the share of the total number of applications did not change compared to the previous week and amounted to 0.4%.

The average contractual interest rate for a regular 30-year fixed-rate mortgage fell from 3.06% to 3.03%. An MBA study found that the average interest rate on a 30-year fixed-rate mortgage with a gigantic balance – over $ 548,250 – dropped to 3.13% from 3.19% a week earlier.

The average interest rate on 15-year fixed rate mortgages fell from 2.41% to 2.38%. Likewise, the average interest rate for 5/1 ARMS dropped to 2.68% from 2.90% over the previous week.

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