Mortgage activity fell after a
The MBA’s Market Composite Index — which tracks the number of applications through a weekly survey of its members — dropped 3.9% on a seasonally adjusted basis for the period ending August 13, while the unadjusted volume showed a 4% decrease. The seasonally adjusted index fell 12% below its level from the same week in 2020.
Refinance and purchase activity both slowed from the previous week, due in part to fluctuating rates following the release of government
Despite averaging higher on a weekly basis, rates still remain below last year’s levels. Since many borrowers already took advantage of low rates to refinance, the eligible pool of homeowners who stand to benefit wanes, Kan noted in a press release. The Refinance Index came in 5% lower week-over-week and dropped 8% from year-ago levels.
The Purchase Index also inched down a seasonally adjusted 1% and 2% on an unadjusted basis. Compared to the same week last year, seasonally adjusted purchases decreased by 19%. Data showed conventional purchase loans dropping, but the pace of government-sponsored applications increasing.
Refinances accounted for 67.3% of the total application pie, compared to 68% the prior week. The share of adjustable-rate mortgage applications remained unchanged at 3.2%.
Loans backed by federal agencies took a higher percentage of mortgage volume. Federal Housing Administration-sponsored applications increased to 9.4% from 8.9% the previous week. The share of Veterans Administration-backed mortgages climbed to 10.3% compared to 9.6% a week earlier, while loans taken through the U.S. Department of Agriculture decreased to 0.4% from 0.5% the prior week.
Average loan sizes for the week shrank to $339,200, down 1.7% from $345,200 the week earlier. Refinance applications averaged $312,700, compared to $321,900 the prior week, a 2.8% drop. The mean size of purchase mortgages also fell by 0.2% to $393,700 from $394,600.
“Despite a second-straight weekly decrease, average loan sizes remain close to record highs,” Kan said in his press statement. “This is a continuing sign that sales prices are still elevated, driven by stiff competition leading to accelerating home-price growth.”
New-home sales contribute to ballooning cost of housing
Numbers from MBA’s Builder Application Survey for July indicated how market demands continue to put
“The housing market is still extremely competitive, and prospective buyers have increasingly turned to newly built homes because for-sale inventories remain so low," Kan said.
The average size of new-home mortgages rose 2.4% on a monthly basis and hit a record-high $402,400, caused by the imbalance between
The MBA estimated there were 64,000 new-home purchases in July, a decline of 3% from
Interest rates rise across categories
Average rates settled higher, with economic data and pandemic developments both influencing their movements.
“Mortgage rates followed an overall increase in Treasury yields last week, which started higher from the strong July jobs report, before slowing because of weaker consumer sentiment and concerns about rising COVID-19 cases,” Kan said.
- The average contract interest rate of 30-year fixed-rate mortgages with conforming loan balances of $548,250 or less jumped to 3.06% from 2.99% the previous week.
- The average contract interest rate of 30-year fixed-rate jumbo loans with balances greater than $548,250 climbed four basis points, coming in at 3.19%, up from 3.15% one week earlier.
- Average FHA-backed 30-year fixed-rates also increased, coming in at 3.15%, compared to 3.06% the prior week.
- The average contract interest rate of 15-year fixed-rate mortgages increased to 2.41%, up six basis points from 2.35% week over week.
- After tumbling over 40 basis points the prior week, the 5/1 adjustable-rate average made a U-turn, jumping up almost as much to 2.9% from 2.52%.
