Mortgage applications rose 1.6% on the week ending Aug. 20, moving in concert with a drop in Treasury yields, according to the latest report from the Mortgage Bankers Association.
The market composite index moved 1% on an unadjusted basis from the prior week. Refis ticked up 1% from the prior week and purchase mortgage applications jumped 3%, the trade group said on Wednesday. The purchase index was at its highest level since early July, though it was still down 16% from the same time last year.
“Treasury yields fell last week, as investors continue to anxiously monitor if the rise in COVID-19 cases in
several states starts to dampen economic activity,” said Joel Kan, the MBA’s associate vice president of economic and industry forecasting. “Mortgage rates slightly declined as a result, with the 30-year fixed rate decreasing for the first time in three weeks. Lower rates led to an increase in refinance applications, with government loan applications jumping 10 percent to the highest level since May 2021.”
Kan also noted that purchase applications for both conventional and government loans increased on the week that ended Aug. 20. But the average loan size on purchase mortgage applications fell, he said, “which is potentially a sign that more first-time buyers looking for lower-priced homes are being helped by the recent uptick in for-sale inventory for both newly built homes and existing homes.”
The mix of refis was unchanged from the previous week at 67.3% of total applications.
According to the MBA, the FHA share of total applications increased to 11% from 9.4% the week prior. The VA share of total applications decreased to 10% from 10.3% the week prior. The USDA share of total applications was unchanged from the prior week at 0.4%.
The average contract interest rate for a 30-year-fixed rate conventional mortgage decreased to 3.03% from 3.06%. The MBA survey found that the average interest rate for a 30-year-fixed-rate mortgage with jumbo balances — greater than $548,250 — decreased to 3.13% from 3.19% the week prior.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.38% from 2.41%. Similarly, the average interest rate for 5/1 ARMS decreased to 2.68% from 2.90% from the prior week.