Mortgage Bankers Association

Loan activity fell for a second consecutive week, dropping to levels last seen in 1996, as a potential government shutdown loomed.

Purchase-loan activity dropped again to its most subdued level in close to three decades, while refinances saw their smallest numbers in eight months, according to the Mortgage Bankers Association.

While a majority of current forborne borrowers sought relief for reasons related to COVID-19, servicers are seeing a growing share of cases involving natural disasters or personal financial issues, the Mortgage Bankers Association said.

The Mortgage Bankers Association attributes this to muted demand for home purchases and companies trimming their operations.

Both loan volumes and interest rates came in mostly flat, but the jumbo average ran ahead of the conforming for the second week in a row, the Mortgage Bankers Association said.

The investor segment will have to be mindful as it gains ground, executives said Tuesday, noting that the sector takes experience, skill and savvy awareness of risks.

The Mortgage Bankers Association sees the likelihood of a rise in sales activity later this year based on recent construction trends, in a turnaround from the 2022 market.

Meanwhile, the average purchase loan amount surged to its highest level in 2023, showing signs of continued demand amid limited inventory.

Conventional and government-backed purchases both increased last week, even with a 12 basis point surge in the 30-year conforming average, the Mortgage Bankers Association said.

But overall availability still remained near a 10-year low in March, with government-backed products falling for the third time in four months, the Mortgage Bankers Association found.