rose during the week ending August 14 and, while purchase applications sustained
some of their momentum, a slowdown in refinancing pulled overall volume down.
The Mortgage Bankers Association said its Market Composite Index, a measure of that
volume, decreased 3.3 percent on a seasonally adjusted basis from one week
earlier and was 4.0 percent lower on an unadjusted basis.
Index decreased 5.0 percent from the previous week and was 38 percent higher
than the same week one year ago. The refinance share of mortgage activity
decreased to 64.6 percent of total applications from 65.7 percent the previous
adjusted Purchase Index increased 1 percent from one week earlier but was 1
percent lower on an unadjusted basis. It was 27 percent higher than the same
week one year ago, the 13th straight week of annual improvement.
Refi Index vs 30yr Fixed
Purchase Index vs 30yr Fixed
data reported last week on retail sales, as well as a large U.S. Treasury
auction, drove mortgage rates to their highest level in two weeks. The rise in
rates dampened refinance activity, but purchase applications continued their
strong run and were 27 percent higher than a year ago – the third straight
month of year-over-year increases,” said Joel Kan, MBA’s Associate Vice
President of Economic and Industry Forecasting. “Conventional purchase
applications drove last week’s increase, while applications for government
loans decreased. The housing market remains a bright spot in the current
economic recovery and these results, combined with July data on housing starts
and homebuilder optimism, suggest that housing supply could be increasing to
better meet the strong demand for buying a home.”
for FHA mortgages declined to 10.3 percent of all received from 10.4 percent
the prior week and the VA share ticked down to 11.2 percent from 11.4 percent.
The USDA share was unchanged at 0.6 percent. The average loan size was $326,800,
$500 larger than the previous week. Purchase loans averaged $367,800 compared
both contract and effective rate were mixed. The average contract interest rate
for 30-year fixed-rate mortgages (FRM) with balances at or below the conforming
limit of $510,400 increased to 3.13 percent from 3.06 percent, with points
increasing to 0.36 from 0.33. The effective rate increased.
with jumbo loan balances that exceeded the conforming limit, had an average
rate of 3.41 percent with 0.35 point. The previous week the rate was 3.40
percent with 0.31 point. The effective rate was also higher.
The rate for
30-year FRM backed by the FHA fell 7 basis points to 3.16 percent and points
declined to 0.27 from 0.33. The effective rate also decreased.
contract interest rate for 15-year FRM increased to 2.73 percent from 2.67
percent, with points increasing to 0.36 from 0.35. The effective rate increased.
contract interest rate for 5/1 adjustable rate mortgages (ARMs) ticked down 5
basis points to 2.95 percent while points grew to 0.41 from 0.30. This left the
effective rate unchanged. The ARM share
of applications remained at 2.7 percent.
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 a 23-basis point decline
in the percentage of loans in forbearance
last week, to 7.21 percent of servicers’ portfolio volume. This left an
estimated 3.6 million homeowners in forbearance plans as of August 9.
share of Fannie Mae and Freddie Mac loans in plans dropped for the 10th
week in a row to 4.94 percent – a 25-basis-point improvement. The share of Ginnie
Mae (FHA and VA) loans decreased by 52 basis points to 9.54 percent, while the
forbearance share for portfolio loans and private-label securities (PLS)
increased by 22 basis points to 10.34 percent. Depository servicers’ held forborne
loans accounting for 7.49 percent of their portfolios and independent mortgage
banks’ (IMB’) share decreased to 7.42 percent.
homeowners exited forbearance last week, leading to the ninth straight drop in
the share of loans in forbearance. However, the decline in Ginnie Mae loans in
forbearance was again because of buyouts of delinquent loans from Ginnie Mae
pools, which result in these FHA and VA loans being reported in the portfolio
category,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist.
“In a sign that more FHA and VA borrowers are struggling with a very tough
job market, more Ginnie Mae borrowers requested than exited forbearance.” Added Fratantoni, “The share of Fannie Mae and Freddie Mac loans in
forbearance has dropped below 5 percent for the first time since April.
Borrowers with conventional mortgages have been faring somewhat better
throughout the current crisis, and there is no sign to date from these data
that the risk to the GSEs is increasing.”
By stage, 38.80 percent of total loans in forbearance are in
the initial forbearance plan stage, while 60.49 percent are in a forbearance
extension. The remaining 0.70 percent are forbearance re-entries.
Total weekly forbearance requests as a percent of servicing
portfolio volume (#) decreased relative to the prior week from 0.12 percent to
0.11 percent. The percentage of forbearance-related calls, however, increased
from 7.8 percent to 7.9 percent.
latest Forbearance and Call Volume Survey covers the period from August 3
through August 9 and represents 75 percent of the first-mortgage servicing
market (37.3 million loans).