by Calculated Risk on 10/21/2020 07:00:00 AM

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 0.6 percent from one
week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage
Applications Survey for the week ending October 16, 2020.

… The Refinance Index increased 0.2 percent from the previous
week and was 74 percent higher than the same week one year ago. The seasonally adjusted Purchase
Index decreased 2 percent from one week earlier
. The unadjusted Purchase Index decreased 2 percent
compared with the previous week and was 26 percent higher than the same week one year ago.

“Mortgage rates increased last week, with the 30-year fixed rate climbing 2 basis points to 3.02 percent –
the highest since late September. Despite the uptick in rates, refinance activity held steady, with FHA
refinance applications posting a 17.6 percent increase, helping to offset declines in the other loan types,”
said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Homebuyer
demand remains strong this fall, but purchase applications did decrease 2 percent, with both conventional
and government purchase activity taking a step back. Given the ongoing housing market recovery and
low rate environment, both purchase and refinance applications remained robust compared to a year ago,
rising 26 percent and 74 percent, respectively.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances
($510,400 or less) increased to 3.02 percent from 3.00 percent, with points increasing to 0.36 from 0.32
(including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Mortgage Refinance IndexClick on graph for larger image.

The first graph shows the refinance index since 1990.

The refinance index has been very volatile recently depending on rates and liquidity.

But with record low rates, the index remains up significantly from last year.

Mortgage Purchase Index
The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is up 26% year-over-year unadjusted.

Note: Red is a four-week average (blue is weekly).

Source link