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Mortgage

Mortgage applications fall for third straight week

Activity at lowest level since beginning of 2020

Mortgage applications decreased again, this time falling 1.8% in the week ending July 2, 2021, according to the latest report from the Mortgage Bankers Association.

This marks the third straight week of application declines, and represents the lowest level since the January 2020.

“Treasury yields have been volatile despite mostly positive economic news, including last week’s June jobs report, which showed ongoing improvements in the labor market,” said Joel Kan, MBA associate vice president of economic and industry forecasting. “However, rates continued to move lower, especially late in the week.”

Kan said the 30-year fixed rate was 11 basis points lower than the same week a year ago, and refinance applications have trended lower than 2020 levels for the past four months.

Those who are filling out purchase mortgage applications are requesting bigger loan amounts, but there are fewer applicants. It has most acutely affected first-time homebuyers.


How to identify fraud risks early in the origination process

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Presented by: FADT

“Swift home-price growth across much of the country, driven by insufficient housing supply, is weighing on the purchase market and is pushing average loan amounts higher,” Kan said.

The refinance share of activity decreased to 61.6% of total mortgage applications from 61.9% the previous week. On an unadjusted basis, the market composite index decreased 1% compared with the previous week. The seasonally adjusted purchase index also decreased only 1% from one week earlier.

The FHA share of total mortgage applications remained increased to 9.8% from the week prior, and the VA share of total mortgage applications increased to 10.8% from 10.5%.

Here is a more detailed breakdown of this week’s mortgage applications data:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.15% from 3.20%
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.20% from 3.23%
  • The average contract interest rate for 30-year fixed-rate mortgages decreased to 3.17% from 3.19%
  • The average contract interest rate for 15-year fixed-rate mortgages also decreased to 2.52% from 2.56%
  • The average contract interest rate for 5/1 ARMs decreased to 2.94% from 2.98%, with points increasing to 0.34 (including the origination fee) for 80% LTV loans

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