Mortgage
application volume rose for the first time in four weeks during the week ended
February 26, but it was only a marginal increase. The Mortgage Bankers Association
(MBA) said its Market Composite Index, a measure of mortgage loan application
volume, increased 0.5 percent on a seasonally adjusted basis from one week
earlier. On an unadjusted basis, the Index increased 2 percent compared with
the previous week.

The
Refinance Index was 0.1 percent higher than during the week ended February 19
and was up 7 percent from the same week in 2020. The refinance share of
mortgage activity decreased to 67.5 percent of total applications from 68.5
percent.

The
seasonally adjusted Purchase Index increased 2 percent and was 5 percent higher
on an unadjusted basis. Volume grew 1 percent compared to the same week last year.

 

Refi Index vs 30yr Fixed

 

Purchase Index vs 30yr Fixed

 

The FHA share of total applications increased to 12.1
percent from 11.2 percent and the VA share rose to 12.3 percent from 11.9
percent. The USDA share ticked up 0.4 percent from 0.3 percent. The origination
balances of all mortgages and of purchase loans declined from the previous
week, the former from $344,800 to $336,200 and the latter from $418,000 to
$412,300.

“Mortgage
rates jumped last week on market expectations of stronger economic growth and
higher inflation. The 30-year fixed rate experienced its largest single-week
increase in almost a year, reaching 3.23 percent – the highest since July
2020,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry
Forecasting. “The overall share of refinances declined for the fourth
consecutive week, and conventional refinance applications fell more than 2
percent to the lowest level in four months. Government refinance applications
historically lag the more rate-sensitive movements of conventional
applications, and that was true last week, as both FHA and VA refinancing
volumes increased.” 

Added
Kan, “The housing market is entering the busy spring buying season with strong
demand.
Purchase applications increased, with a rise in government applications
– likely first-time buyers – pulling down the average loan size for the first
time in six weeks.” 

The
average contract interest rate for 30-year fixed-rate mortgages (FRM) with balances
below the conforming limit
of $548,250 increased to 3.23 percent from 3.08
percent and points to 0.48 from 0.46. The effective rate was 3.37 percent.   

The
rate for jumbo 30-year FRM, loans with balances greater than the conforming limit,
averaged 3.33 percent, a 10 basis point increase, with points dipping to 0.41 from 0.43. The effective rate rose to 3.45
percent. 

The
rate for 30-year FRM backed by the FHA averaged 3.19 percent with 0.30 point
compared to 3.00 percent with 0.33 point the prior week. The effective rate was
3.28 percent.  

Fifteen-year
FRM had an average rate of 2.64 percent, up 8 basis points week-over-week. Points
decreased to 0.39 from 0.40 and the effective rate increased to 2.74 percent.

The
average contract interest rate for 5/1 ARMs was 2.84 percent compared to 2.83
percent, with points increasing to
0.58 from 0.36. The effective rate increased from the prior week, but MBA did
not provide a rate. The adjustable-rate mortgage (ARM) share of activity
increased to 2.9 percent of total applications.

MBA’s 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’s
latest Forbearance and Call
Volume Survey found a small increase in the total number of loans in
forbearance during the week
of February 15 through February 21. The percentage
of loans in plans ticked up 1 basis point to 5.23 percent of all active loans.
MBA estimates 2.6 million homeowners are now in forbearance. Of those loans, 15.6
percent are in the initial forbearance plan stage, 81.9 percent are in an extension,
and 2.5 percent have re-entered the program.   

The
share of Fannie Mae and Freddie Mac (GSE) loans in forbearance remained flat
relative to the prior week at 2.97 percent. The share of Ginnie Mae (FHA and
VA) loans increased 3 basis points to 7.35 percent and there was a 9-basis
point increase in the share of forborne loans serviced for bank portfolio and private-label
securities (PLS) to 9.03%. The percentage of loans in forbearance serviced by
independent mortgage bank (IMB) servicers increased 3 basis points to 5.57
percent and the percentage for depository servicers increased 1 basis point to
5.29 percent.

“A small increase in new
forbearance requests, coupled with exits decreasing to match a survey low, led
to the overall share of loans in forbearance increasing for the first time in
five weeks,” said Mike Fratantoni,
MBA’s Senior Vice President and Chief Economist. “The largest rise in the
forbearance share was for portfolio and PLS loans, due to increases for both
Ginnie Mae buyouts and other portfolio/PLS loans.” 

Fratantoni added, “The winter storm that impacted Texas and other states did lead to
some temporary disruptions at servicer call centers, but these centers quickly
returned to full operations.”

By Jann Swanson , dated 2021-03-03 08:25:56

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Courtesy of Mortgage News Daily

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