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Economy in Brief

U.S. Mortgage Applications Rebound
by Sandy Batten  August 11, 2021

• Applications rebound for both purchase and refinance.

• First increase in purchase applications in four weeks.

• Fixed rate mortgage interest rates edged up.

The Mortgage Bankers Association's Loan Applications Index rose 2.8% w/w (-11.5% y/y) in the week ended August 6, more than reversing a 1.7% decline in the previous week. Applications for purchase increased 1.8% w/w (-17.8% y/y), their first increase in four weeks and only the second in the past seven weeks. Applications for refinancing jumped 3.2% w/w (-8.5% y/y) versus a 1.7% weekly drop in the previous week.

The share of applications for refinancing rose to 68.0% of total applications in the week ended August 6 from 67.6% in the previous week. The August 6 reading was the largest share since 68.5% in the week ended February 19. The adjustable-rate mortgage (ARM) share of activity edged down to 3.2% from 3.4% in the prior week.

The effective interest rate on a 30-year mortgage edged up one basis point to 3.08% last week, only its second increase in the past six weeks. The effective 15-year rate rose two basis points to 2.41% from 2.39%, which was the historical low for the series that dates back to January 5, 1990. The effective rate for a 30-year Jumbo mortgage loan increased three basis points to 3.23%. By contrast, the rate on a 5-year adjustable rate loan dropped 42 basis points to a new series low of 2.58% (this series dates back only to January 2011).

Applications for fixed-rate loans gained 3.0% w/w (-11.9% y/y) in the week ended August 6 following a 1.6% decline in the prior week. Applications for adjustable-rate mortgages fell 4.8% w/w (+4.6% y/y) on top of a 4.2% weekly decline in the previous week.

The average size of mortgage loans was essentially unchanged at $345,200 in the week ended August 6 versus $345,300 in the previous week. The size of loans to purchase edged up 0.1% w/w to $394,600. The size of refinanced loans was unchanged at $321,900.

This survey covers over 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver's SURVEYW database.

MBA Mortgage Applications (%, SA) 08/06/21 07/30/21 07/23/21 Y/Y 2020 2019 2018
Total Market Index 2.8 -1.7 7.0 -11.5 63.0 32.4 -10.4
  Purchase 1.8 -1.7 -1.5 -17.8 11.4 6.6 2.1
  Refinancing 3.2 -1.7 11.2 -8.5 111.0 71.1 -24.3
30-Year Effective Mortgage Interest Rate (%) 3.08 3.07 3.11 3.20

(Aug '20)

3.40 4.34 4.94
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