Mortgage applications rise, reflecting improving inventories

The volume of first mortgage applications increased 4.9 percent on a seasonally adjusted basis for the first full week after Labor Day. The Mortgage Bankers Association (MBA) reports that its Composite Market Index, a measure of the volume of mortgage applications, rose 16% during the week ended September 17. The figures for the previous week had been adjusted to take into account the holidays.

The refinancing index rose 7 percent compared to the previous week, but was 5% lower than the same week a year ago. The refinancing share of mortgage activity rose to 66.2% of total applications, from 64.9% the previous week.

Seasonally adjusted The buy index was 2 percent higher week-over-week and 12 percent unadjusted. The volume was 13% lower than the same week a year ago.

Refi index vs 30 years Fixed

Buy index vs 30 years fixed

“There was a surge in mortgage applications the week after Labor Day, with overall activity at its highest level in over a month, and purchase requests hit an all-time high in April. 2021, ”said Joel Kan, associate vice president of MBA. and industry forecasts. “Housing demand is strong as fall approaches, despite rapidly rising home prices and low inventories. The inventory situation is improving, with more new homes under construction and more homeowners listing their homes. Despite this week’s increase, purchase requests were still 13% lower than the same week a year ago. ”

Kan added, “Homeowners acted as rates remained low at 3.03%.

FHA’s share of total claims increased to 11.5% from 9.9% the previous week, VA’s share rose from 10.2% to 10.4%, and USDA’s share rose 0.1 point to 0.5%. The amount of loans for which applications were received increased from $ 338,500 to $ 333,200 and the average amount of purchase loans increased from $ 396,800 to $ 396,300.

The average contractual interest rate for 30-year fixed rate mortgages (FRMs) with compliant loan balances of $ 548,250 or less remained unchanged at 3.03%. The points fell from 0.32 to 0.30 and the effective rate fell to 3.11%.

The 30-year jumbo FRM rate, loans whose balance exceeds the compliant limit, was 3.11% with 0.25 points. The previous week it was 3.13% with 0.21 point. The effective rate fell to 3.18%.

The 30-year FRM with FHA backing had an average rate of 3.07%, up 3 basis points from the previous week. The points fell from 0.27 to 0.25 and the effective rate rose to 3.15%.

The rate of 2.34 percent for 15-year fixed-rate mortgages was unchanged from the previous week. The points fell to 0.24 from 0.29, lowering the effective rate to 2.40%.

The average contractual interest rate for 5/1 variable rate mortgages (ARMs) was 2.51%, down 17 basis points from the previous week. The points fell from 0.11 to 0.12 and the effective rate fell to 2.55%. ARM’s business share declined to 2.9% of total apps, from 3.3% a week earlier.

The MBA Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all personal loan applications in the United States. The base period and value of all indices is March 16, 1990 = 100 and interest rate information is based on loans with 80% loan-to-value ratio and points that include origination charges .

According to the MBA forbearance and appeal volume survey, the number of forbeared loans fell 8 basis points in the week ending September 12. The 3.00 percent of service agent portfolios remaining in active plans equals 1.5 million owners. By stages, 11.3 percent of the renounced loans are within their original term, 80.2 percent have been extended, and the remaining 8.5 percent are reinstatements into the program.

The part of Fannie Mae and Freddie Mac loans in forbearance decreased by 5 basis points during the week to 1.47 percent of these loans. Ginnie Mae (FHA and VA) remained at 3.39% of those totals. The share of loans managed for bank portfolios and private label securities (PLS) fell 32 basis points to 6.95%. The percentage of forbeared loans managed by independent mortgage bank (IMB) services was reduced by 8 basis points to 3.25% and those managed by depository services decreased by 5 basis points to 3.10% .

“The share of forbearance loans decreased by 8 basis points last week as forbearance outflows remained high and new forbearance applications and inflows remained unchanged,” said Mike Fratantoni, senior vice president and chief economist of MBA. “20% of loans in forbearance are either new forbearance requests or receipts. At this point, forbearance extended borrowers exit at a faster rate as they approach – or reach – the expiration of their maximum forbearance.

MBA’s latest forbearance and call volume survey covers the period Sept. 6-12 and accounts for 74 percent of the 36.8 million loans in the senior mortgage services market.

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