Even though mortgage purchase application activity was down compared to the week before, it was up compared to the same week in the prepandemic year of 2019, as well as in the same week last year.
The Mortgage Bankers Association's Market Composite Index, its measure of application activity, for the week ended March 26 showed a decline of 2.2% on a seasonally adjusted basis compared with the previous week. Compared with the same week in 2020, it was down 15.1%.
"Mortgage applications for refinances and home purchases both declined, but purchase activity was still convincingly higher than the pandemic-induced drop seen a year ago, as well as up 6% from the same week in March 2019," Joel Kan, the MBA's associate vice president of economic and industry forecasting in a press release.
The refi index fell by 3% from a week ago, and was 32% lower than the same week last year. The purchase index was down 2% on a seasonally adjusted basis from last week; unadjusted, the index was down 1% from a week ago but up 39% from the same week in 2020.
There was some marginally good news of late, as the 30-year fixed rate mortgage had its first decline after rising for seven consecutive weeks, but it was still almost half a percentage point higher than it was at the start of 2021, Kan pointed out. Many prospective homebuyers are feeling the effects of those higher rates, along with rapidly accelerating home prices.
"Record-low inventory is pushing home-price growth at double the rate from a year ago, and even above the 10% growth rates seen in 2005," Kan continued. "The housing market is in desperate need of more inventory to cool price growth and preserve affordability."
Refis made up 60.6% of the new applications submitted, down marginally from 60.9% one week prior. For the week in 2019 that Kan referenced, purchases made up 59.6% of the activity.
The share of adjustable rate mortgage applications rose to 3.4% this week from 3.2% a week ago.
Federal Housing Administration-insured mortgage applications saw a 4 basis point decline in share for the week, to 11.3% from 11.7% the week prior. But a greater percentage of borrowers applied for Veterans Affairs-guaranteed mortgages, with the share increasing by 5 bps week-over-week to 10.3% from 9.8% the week prior. But the share of U.S. Department of Agriculture/Rural Housing Service applications remained flat at 0.4%.
Average rates for the conforming 30-year FRM (loan balance of $548,250 or less) fell 3 bps to 3.33% from the previous week, while for jumbo mortgages (balances above $548,250), the rate dropped 6 bps to 3.34%.
The average for FHA-insured loans fell by 6 bps to 3.29%. There was a decline of 1 bp for the 15-year FRM to 2.71%.
However rates for the 5/1 ARM increased six bps to 2.85% on a week-to-week basis.
"activity" - Google News
March 31, 2021 at 06:00PM
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Purchase application activity, while down, remains a bright spot - National Mortgage News
"activity" - Google News
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