volume bounced back into positive territory last week, even though banks and
many businesses were closed on Friday for the Independence Day Holiday. The
Mortgage Bankers Association (MBA) said its Market Composite Index, a measure
of that volume, was 2.2 percent higher on a seasonally adjusted basis, which
included an adjustment for the holiday, from the previous week, although volume
was down 8 percent before adjustment.
Index rose 0.4 percent week-over-week and was 111 percent higher than the same
week one year ago. The refinance share of mortgage activity decreased to 60.1
percent of total applications from 61.2 percent the previous week.
adjusted Purchase Index gained 5 percent week-over-week while declining by the
same amount before adjustment. It was up 33 percent compared to the same week
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
declined to another record low as renewed fears of a coronavirus resurgence
offset the impacts from a week of mostly positive economic data, such as June
factory orders and payroll employment. The 30-year fixed rate slipped to 3.26
percent – down 53 basis points since late March. Borrowers acted in response to
these lower rates, after accounting for the July 4th holiday,” said Joel Kan,
MBA’s Associate Vice President of Economic and Industry Forecasting.
applications continued their recovery, increasing 5 percent to the highest
level in almost a month and 33 percent from a year ago. The average purchase
loan size increased to $365,700 – also another high – as borrowers contend with
limited supply and higher home prices.”
“Refinance applications increased slightly, driven by a 2 percent rise in
conventional refinances. Overall refinance activity was up 111 percent from
FHA share of total applications decreased to 10.9 percent from 11.7 percent and the VA share dipped to 10.4 percent from 10.8
percent compared to the prior week. USDA loans accounted for 0.7 percent of
applications, up from 0.6 percent the week prior.
declined for all loans types on both a contract and an effective basis. The
average contract interest rate for 30-year fixed-rate mortgages (FRM) with
balances at or below the conforming limit of $510,400 decreased to 3.26 percent
from 3.29 percent. Points moved from 0.36 to 0.35.
rate for jumbo 30-year FRM, loans with balances greater than the conforming
limit, decreased to 3.52 percent with 0.36 point from 3.59 percent with from
Thirty-year FRM backed
by the FHA had a rate of 3.31 percent compared to 3.43 percent the prior week.
Points fell to 0.24 from 0.36.
The average rate
for 15-year FRM was 2.77 percent with 0.32 point. The previous week it was 2.81
percent with 0.40 point.
average contract interest rate for 5/1 adjustable rate mortgages (ARMs) dropped
6 basis points to 2.98 percent with
points increasing to 0.10 from -0.03. The adjustable-rate mortgage (ARM) share
of activity increased from 3.2 percent to 3.4 percent of total applications.
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 also reported the third straight weekly
drop in the number and percentage of all loans in COVID-19 related forbearance.
As of June 28, there were about 4.2 million homeowners in forbearance plans, or
8.39 percent of servicer portfolios, down 8 basis points from the previous one-week
The share of Fannie Mae
and Freddie Mac loans in forbearance dropped for the fourth week to 6.17
percent, a 9-basis-point improvement. Forborne loans in portfolios serviced for
Ginnie Mae (FHA and VA loans) decreased 11 basis points to 11.72 percent. The
forbearance share for portfolio loans and private-label securities (PLS)
increased by 1 basis point to 10.08 percent.
The percentage of loans
in forbearance for depository servicers dropped to 9.03 percent, while the
percentage of loans in forbearance for independent mortgage bank (IMB)
servicers decreased to 8.33 percent.
“We learned last week that the job market improved more
than expected in June. With that as background, it is not surprising that the
forbearance numbers continue to improve as more people go back to their jobs,” said Mike Fratantoni, MBA’s Senior Vice
President and Chief Economist. “The improvement in the
forbearance data was broad-based, with declines for both GSE and Ginnie Mae
loans. The decrease in new forbearance requests indicates that further declines
are likely in the weeks ahead.”
Added Fratantoni, “Looking at the mix of loans that are
exiting forbearance, we are seeing a higher share exiting into deferral options
and modifications, and somewhat fewer simply opting out of a forbearance plan.”
MBA’s latest Forbearance and Call
Volume Survey covers the period from June 22 through June 28, 2020 and
represents 76% of the first-mortgage servicing market (38.2 million loans).