Mortgage Application volume continued to trend down during the week ended March 26. The Mortgage
Bankers Association (MBA) said its Market Composite Index, a measure of that volume,
declined 2.2 percent on a seasonally adjusted basis from the previous week and
was down 2 percent on an unadjusted basis. It was the tenth time the index has
declined in the 13 weeks since 2021 began.
Index decreased 3 percent from the previous week and was 32 percent lower than
the same week one year ago. Refinancing, however, still accounts for the lion’s
share of applications, 60.6 percent during the week, down only slightly from the
week ended March 19.
seasonally adjusted Purchase Index decreased 2 percent from one week earlier. Unadjusted,
the Index was down 1 percent and was 39 percent higher than the same week one
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
seven consecutive weeks of increasing mortgage rates, the 30-year fixed rate
declined 3 basis points to 3.33 percent, which is still almost half a
percentage point higher than the start of this year. 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 percent from the same week in March 2019,” said Joel Kan, MBA’s Associate
Vice President of Economic and Industry Forecasting. “Many prospective
homebuyers this spring are feeling the effects of higher rates and 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 percent growth rates
seen in 2005. The housing market is in desperate need of more inventory to cool
price growth and preserve affordability.”
The FHA share of total applications
decreased to 11.3 percent from 11.7 percent while the VA share grew to 10.3
percent from 9.8 percent. The USDA share was unchanged at 0.4 percent. The average loan balance
decreased for all loans from $333,000 the previous week to $324,800. Purchase
loan balances were also smaller than a week earlier, $401,400 compared to $409,300.
The average contract interest rate for
30-year fixed-rate mortgages (FRM) with balances at or below the conforming limit
of $548,250, decreased to 3.33 percent from 3.36 percent, with points dropping
to 0.39 from 0.42. The effective dipped to
3.44 percent. .
The average contract interest rate for jumbo
30-year FRM., loans with balances exceeding the conforming limit, decreased to
3.34 percent from 3.40 percent, with
points decreasing to 0.31 from 0.43. The effective rate was 3.43 percent.
30-year FRM had an average rate of 3.29 percent, down from 3.35 percent the
previous week. Points decreased to 0.34 from 0.41 and the effective rate was
reduced to 3.39 percent.
rate for 15-year fixed-rate mortgages dipped 1 basis point to 2.71 percent and
points fell to 0.33 from 0.40. The
effective rate was 2.80 percent.
average contract interest rate for 5/1 adjustable rate mortgages increased to
2.85 percent from 2.79 percent, with
points decreasing to 0.40 from 0.44. The effective rate increased to 3.0
percent. The ARM share of all applications grew to 3.4 percent from 3.2 percent
the prior week.
Weekly Mortgage Applications Survey has been conducted since 1990 and covers
over 75 percent of all U.S. retail residential applications Respondents include
mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes
is March 16, 1990=100 and interest rate information is based on loans with an
80 percent loan-to-value ratio and points that include the origination fee.
MBA said its latest Forbearance and
Call Volume Survey showed a 9 basis point reduction in the total number of
loans now in forbearance. As of March 21, there were approximately 2.5 million
homeowners in plans, 5.05 percent of servicers’ total portfolios. By stage,
13.8 percent of total loans in forbearance are in the initial forbearance plan
stage, while 83.4 percent are in a forbearance extension. The remaining 2.8
percent are forbearance re-entries.
The share of Fannie Mae and Freddie
Mac loans in forbearance decreased to 2.77 percent – a 6-basis-point
improvement. Ginnie Mae (VA/FHA) loans in forbearance fell 20 basis points to
6.83 percent, while the forbearance share for portfolio loans and private-label
securities (PLS) declined 1 basis point to 8.90 percent. The percentage of
loans in forbearance by independent mortgage bank (IMB) servicers decreased 14
basis points to 5.23 percent, and those serviced by depository servicers were down
5 basis points to 5.10 percent.
“The share of loans in forbearance
decreased for the fourth straight week, dropping below 5 percent for the first
time in a year. New forbearance requests remained at their lowest level since
last March, and the pace of exits increased,” said Mike Fratantoni, MBA’s
Senior Vice President and Chief Economist. “More than 17 percent of borrowers
in forbearance extensions have now exceeded the 12-month mark.”
Fratantoni added, “Many homeowners
need this support, even as there are increasing signs that the pace of economic
activity is picking up as the vaccine rollout continues. Those who have an
ongoing hardship due to the pandemic and want to extend their forbearance
beyond the 12-month point need to contact their servicer. Servicers cannot
automatically extend forbearance terms without the borrower’s consent.”
MBA’s latest Forbearance and Call
Volume Survey covers the period from March 15 through March 21, 2021 and
represents 74 percent of the first-mortgage servicing market (37.1 million