For the week ending July 9, 2021, mortgage applications increased 16.0% from one week earlier, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. This week’s results include an adjustment for the Fourth of July holiday.
The breakdown:
– Seasonally Adjusted Market Composite Index: +16.0% WoW
– Unadjusted Market Composite Index: -7% WoW
– Refinance Index: +20% WoW
– Seasonally Adjusted Purchase Index: +8% WoW
– Unadjusted Purchase Index: -13% WoW
The takeaway:
Application spikes are being driven primarily by the increasing popularity of refinancing amid low rates.
“Treasury yields have trended lower over the past month as investors remained concerned about the COVID-19 variant and slowing economic growth,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “Mortgage rates fell for the second consecutive week as a result, with the 30-year fixed rate hitting 3.09%, its lowest level since February 2021. Refinance applications increased over 20% last week after adjusting for the July 4 holiday, aided by a 23% increase in conventional refinance applications. Also, there may have been a delayed spillover of applications from the previous week, when rates also decreased, but there was not much of response in terms of refinance applications.”
Added Kan: “Purchase applications increased last week, but average loan sizes decreased to their lowest level since January 2021. We continue to see ebbs and flows as housing demand remains strong, but for-sale inventory remains low. However, lower rates may be helping some home buyers close on their purchases, especially first-time homebuyers. The year-over-year comparisons were down significantly for both purchase and refinance applications, as they were relative to a non-holiday week in 2020.”
