applications volume fell for the second time during the week ended August 21,
declining 6.5 percent from the previous week according to the Mortgage Bankers
Association’s (MBA’s) seasonally adjusted Market Composite Index. The volume
was down 7.0 percent before adjustment.
Index lost 10 percent from the previous week’s level and the refinancing share
of all activity declined 2 percentage points to 62.6 percent. The Index was
still 34 percent higher than during the same week in 2019.
adjusted Purchase Index eked out an 0.4 percent gain but was down 2.0 percent
on an unadjusted basis. It was 33 percent higher than the same week one year
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
were mixed last week, but the rates for 30-year fixed mortgages and 15-year
fixed mortgages declined. Despite the lower rates, conventional refinance
applications fell 11 percent and government refinance applications fell 6
percent, which pushed the total refinance index to its lowest weekly level
since July,” said Joel Kan, MBA’s Associate Vice President of Economic and
Industry Forecasting. “The home purchase market remains a bright spot for the
overall economy. Purchase applications were essentially unchanged but were 33
percent higher than a year ago – the 14th straight week of
year-over-year gains. Mortgage rates at record lows and households looking for
more space are driving this summer’s surge in demand.”
FHA share of total applications increased to 10.5 percent from 10.3 percent the
prior week and the VA share grew to 11.8 percent from 11.2 percent. The USDA
share of total applications remained unchanged at 0.6 percent. The average loan
size increased from $326,800 to $327,000 but the size of purchase loans edged
down $1,000 to $366,800
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 3.11 percent from 3.13 percent, with points
increasing to 0.38 from 0.36. The effective rate decreased.
The rate for jumbo 30-year FRM, loans with
balances exceeding the conforming limit was unchanged at 3.41 percent with 0.35
point. The effective rate was also unchanged from the prior week.
was no change as well for 30-year FRM backed by the FHA That rate remained at 3.16
percent. Points increased to 0.29 from 0.27 but the effective rate was unchanged.
had a 3-basis point decline in the average rate to 2.70 percent. Points
increased to 0.39 from 0.36 and the effective rate decreased.
average contract interest rate for 5/1 adjustable rate mortgages (ARMs) jumped to
3.14 percent from 2.95 percent. Points ticked up to 0.42 from 0.41 and the
effective rate increased from last week.
The ARM share of activity decreased from 2.7 to 2.6 percent of total
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
MBA also reported that its latest Forbearance
and Call Volume Survey found only a 1 basis point dip in the total number of
loans in forbearance since the previous survey. As of August 16, 7.21 percent of loans in
servicer portfolios, approximately 3.6 million, were in forbearance plans.
The share of Fannie Mae and Freddie
Mac loans in forbearance also declined by only 1 basis point to 4.93 percent.
The forborne share of those serviced for Ginnie Mae was flat at 9.54 percent
and the share of portfolio and private-label securities (PLS) loans increased
by 3 basis points to 10.37 percent. The percentage of loans in forbearance for
depository servicers dropped 1 basis point to 7.48 percent and those in independent
mortgage bank (IMB) servicing increased 1 basis point to 7.43 percent.
“The share of loans in forbearance
declined for the tenth week in a row, but the rate of improvement has slowed
markedly. The extremely high rate of initial claims for unemployment insurance and
high level of unemployment remain a concern and are indications of the
challenges many households are facing,” said Mike Fratantoni, MBA’s Senior Vice
President and Chief Economist. “While new forbearance requests remain low,
particularly for Fannie Mae and Freddie Mac loans, the pace of exits from
forbearance has declined for two straight weeks.”
By stage, 37.91 percent of total loans in forbearance are in
the initial forbearance plan stage, while 61.34 percent are in a forbearance
extension. The remaining 0.75 percent represent re-entries into forbearance
There were slightly fewer forbearance requests as a percent
of servicing portfolio volume (#), down from 0.11 to 0.10 percent, but the
volume of calls regarding forbearance increased from 7.9 percent to 8.7 percent.
MBA’s latest Forbearance and Call Volume Survey covers the
period from August 10 through August 16, 2020, and represents 75 percent of the
first-mortgage servicing market (37.3 million loans)