Mortgage applications decreased 3.9% from last week, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Aug. 13, 2021.
The findings:
– The Market Composite Index, a measure of mortgage loan application volume, decreased 3.9% on a seasonally adjusted basis.
– On an unadjusted basis, the index decreased 4%.
– The Refinance Index decreased 5% and was 8% lower YoY.
– The seasonally adjusted Purchase Index decreased 1%.
– The unadjusted Purchase Index decreased 2% compared with the previous week and was 19% lower YoY.
The takeaway:
“Mortgage rates were at their highest levels in around a month, with the 30-year fixed rate increasing above 3% to 3.06%. Mortgage rates followed an overall increase in Treasury yields last week, which started higher from the strong July jobs report before slowing because of weaker consumer sentiment and concerns about rising COVID-19 cases,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting.
While refi applications have skyrocketed in recent months as homeowners look to take advantage of historic low rates, the pool of eligible homeowners who stand to benefit is getting smaller.
“The increase in mortgage rates caused a 5% decrease in refinancing, driven by a 7% drop in conventional refinance applications. Even though rates are 7 basis points lower than the same week a year ago, the refinance index is around 8% lower,” said Kan.
“Purchase applications also saw a mixed results, with conventional purchase applications down and government purchases up. Government purchase loans, such as FHA loans, are typically popular with first-time buyers,” added Kan. “Despite a second-straight weekly decrease, average loan sizes remain close to record highs. This is a continuing sign that sales prices are still elevated, driven by stiff competition leading to accelerating home-price growth.”
