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2021 RealTrends Brokerage Compensation Report

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Mortgage

Mortgage applications jump 16%

Increase corresponded with decline in rates last week

After several consecutive weeks of drops, mortgage applications jumped 16% for the week ending July 9, 2021, according to the latest report from the Mortgage Bankers Association.

The prior week‘s report showed a 1.8% drop in applications to the lowest level since January 2020.

The sudden increase in applications was driven “heavily” by increased refinancing as mortgage rates dipped again, said Joel Kan, MBA associate vice president of economic and industry forecasting.

“Treasury yields have trended lower over the past month as investors remained concerned about the COVID-19 variant and slowing economic growth,” Kan said. “There also may have been a delayed spillover of applications from the previous week, when rates also decreased but there was not much of response in terms of refinance applications.”

Those lower rates may be helping some homebuyers close on their purchases, especially first-time homebuyers, Kan said.


How to identify fraud risks early in the origination process

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Presented by: FADT

“We continue to see ebbs and flows as housing demand remains strong, but for-sale inventory remains low,” he said. “The year-over-year comparisons were down significantly for both purchase and refinance applications.”

The sheer amount of bidding wars decreased from May to June, per a study released this week from Redfin, as more homes for sale have slowly hit the market in the past month. Overall inventory is still low, of course, but a cooling of the market could lead to more would-be buyers and an increase in mortgage applications soon, experts said.

The refinance share of activity of total mortgage applications increased to 64.1% from 61.6% the previous week. On an unadjusted basis, the market composite index decreased 13% compared with the previous week. However, the seasonally adjusted purchase index increased 8% from one week earlier.

The FHA share of total mortgage applications decreased to 9.5% from 9.8% the week prior, and the VA share of total mortgage applications decreased to 10.3% from 10.8%.

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 3.09% from 3.15%
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.16% from 3.20%
  • The average contract interest rate for 30-year fixed-rate mortgages decreased to 3.15% from 3.17%
  • The average contract interest rate for 15-year fixed-rate mortgages also decreased to 2.48% from 2.52%
  • The average contract interest rate for 5/1 ARMs increased to 3.02% from 2.94%, with points decreasing to 0.32 (including the origination fee) for 80% LTV loans

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