continued to slide but purchase mortgage activity partially compensated during
the holiday shortened week that ended May 29. The Mortgage Bankers Association
(MBA) said its Market Composite Index, a measure of mortgage loan application
volume, decreased 3.9 percent on a seasonally adjusted basis from one week
earlier. On an unadjusted basis, probably due to the holiday, the Index was
down 14 percent.
slipped another 9 percent although it remained 137 percent higher than the same
week one year ago. Over the last seven weeks the Refinancing Index has lost an
aggregate of 30 percentage points. The refinance share of mortgage activity
decreased to 59.5 percent of total applications from 62.6 percent the previous
The Purchase Index
posted its seventh straight gain, a 5.0 percent increase on a seasonally
adjusted basis but was down 7 percent unadjusted. Purchase activity is now 18
percent higher than the same week in 2019.
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
continued their recent ascent, increasing 5 percent last week and 18 percent
compared to a year ago. The pent-up demand from homebuyers returning to the
market continues to support a recovery from the weekly declines observed
earlier this spring,” said Joel Kan, MBA’s Associate Vice President of Economic
and Industry Forecasting. “However, there are still many households affected by
the widespread job loss and current economic downturn. High unemployment and
low housing supply may restrain a more meaningful rebound in purchase
applications in the coming months.”
Added Kan, “In
contrast to the upswing in purchase activity, refinance applications fell for
the seventh consecutive week – even as the 30-year fixed rate hit another MBA
survey-low of 3.37 percent. After reaching a peak of 76 percent earlier this
year, refinances now account for less than 60 percent of activity, and the
index is now at its lowest level since February 21.”
The FHA share of total applications was unchanged from
the previous week at 11.2 percent and the VA share dipped to 12.0 percent from
12.4 percent. USDA loans accounted for 0.7 percent or total applications. The
average loan balance rose from $314,900 to $319,000 and purchase balances from
$340,200 to $342,900.
rates were lower for all contract rates except FHA loans. The effective rate
rose for both FHA and adjustable rate mortgages (ARMs).
average contract interest rate for 30-year fixed-rate mortgages (FRM) with loan
balances at or below the conforming limit of $510,400 fell to 3.37 percent from
3.42 percent. Points dipped to 0.30 from 0.33.
contract interest rate for jumbo 30-year FRM, loans with balances exceeding the
conforming limit, was 3.66 percent with 0.30 point. The prior week the rate was
3.71 percent with 0.29 point.
The rate for 30-year
FRM backed by the FHA increased to 3.46 percent from 3.41 percent. Points dropped
to 0.23 from 0.30.
had an average rate of 2.85 percent, down 2 basis points from the prior week.
Points decreased to 0.27 from 0.30.
The average contract interest rate for 5/1 adjustable
rate mortgages (ARMs) decreased to 3.05 percent from 3.08 percent, with points increasing to 0.25 from
0.01. The adjustable-rate mortgage (ARM) share of activity increased to 3.5
percent of total applications from 3.4 percent the previous week.
MBA’s Weekly Mortgage
Applications Survey 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’s latest Forbearance
and Call Volume Survey found that, as of May 24, there were 4.2 million
mortgage loans in COVID-19 forbearance plans. This is 8.46 percent of servicer
portfolios, up from 8.36 percent the previous week and the smallest increase
reported since the week of March 9.
continues to indicate that fewer homeowners are seeking forbearance as more
states across the country reopen their economies and prospects begin to
improve. The share of loans in forbearance increased by only 10 basis points
over the week of May 24th,” said Mike Fratantoni, MBA’s Senior Vice
President and Chief Economist. “Policy support for households, including
expanded unemployment insurance benefits and other transfers, have helped many
stay on their feet during this crisis.”
“Forbearance requests and call volume declined relative to the prior week and
led to further declines in wait times and abandonment rates.”
Loans backed by
Ginnie Mae (FHA, VA, and USDA mortgages) again had the largest share of loans
in forbearance at 11.82 percent. They also had the largest week-over-week
increase among investor types, 22 basis points. The share of Fannie Mae and
Freddie Mac loans in plans grew 3 basis points to 6.39 percent and loans
serviced for others such as private label securities investors rose from 9.54
percent to 9.67 percent.
The number of
loans in forbearance for depository servicers was 9.19 percent, a 6-basis point
uptick, while the percentage for independent mortgage bank (IMB) servicers
increased 10 basis points to 8.21 percent.
requests as a percent of servicing portfolio volume (#) dropped across all
investor types for the sixth consecutive week: from 0.28 percent to 0.20
percent. Call center volume decreased from 8.6 percent of servicing portfolio
volume (#) to 6.6 percent – the lowest since this survey series began in the
week of March 2.
MBA’s latest Forbearance and Call
Volume Survey covers the period from May 18 through May 24, 2020 and represents
almost 75 percent of the first-mortgage servicing market (37.6 million loans).