Mortgage purchase volume continues to weaken
After a strong performance during the week ended July 9, the volume of mortgage applications declined. The Mortgage Bankers Association (MBA) Composite Market Index, a measure of this volume, decreased by 4.0 percent on a seasonally adjusted basis for the week ended July 16, although it was 20% higher than the previous week before adjustment.
The refinancing index fell 3 percent compared to the previous week and was 18% lower than in the same week a year ago, but the share of refinancing of total claims fell to 64.9% of total claims from 64.1% the previous week.
Seasonally adjusted purchasing index fell 6 percent but was 17% higher on an unadjusted basis compared to the previous week and 18% lower than the same week in 2020.
Refi index vs 30 years Fixed
Buy index vs 30 years fixed
“The 10-year Treasury yield fell sharply last week, in part because investors are increasingly concerned about the spread of COVID variants and their impact on global economic growth. fixed rate increasing slightly to 3.11% after two weeks of decline. Other rates studied fell, with the 15-year fixed-rate loan, used by around 20% of refinanced borrowers, falling to 2.46% – the lowest level since January 2021, ”said Joel Kan, vice-president. -Associate President of Economic and Industrial Forecasting of the MBA. “On a seasonally adjusted basis compared to July 4e Holiday week mortgage requests were lower overall, with purchase requests returning to their lowest levels since May 2020. Limited inventory and higher prices are preventing some potential buyers from pulling out of the market. Refinancing activity fell during the week, but as rates remained relatively low, the pace of applications was close to its highest level since early May 2021. ”
The FHA share of applicationsincreased to 9.6% from 9.5% the previous week and the VA share fell from 10.3% to 10.5%. USDA’s share was unchanged at 0.5 percent. The average loan size increased from $ 345,900 to $ 343,800, while the purchase loan size was $ 401,300, down from $ 398,600.
As Kan said, rates were mixed, the 30-year fixed rate mortgage (FRM) average with compliant loan balances of $ 548,250 or less, up 2 basis points to 3.11 %, the point going from 0.37 to 0.43. The effective rate rose to 3.23%
The rate for giant 30-year FRM, loans whose balance exceeds the compliant limit, decreased to 3.13% against 3.16%, with points going from 0.27 to 0.32. The effective rate fell to 3.22%.
30-year FRM supported by the FHA had an average rate of 3.08 percent versus 3.15 percent, with points increasing to 0.31 from 0.29. The effective rate was 3.17%.
The rate for 15 years old FRM was 2.46% with 0.30 point, against 2.48%, with 0.32 point the previous week. The effective rate was 2.54
The most significant change is in 5/1 variable rate mortgages (ARMs), a drop of 28 basis points to 2.74% and a drop of points from 0.32 to 0.19. The effective rate was 2.8%. The share of variable rate mortgage (ARM) activity decreased to 3.3% of total applications.
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 are March 16, 1990 = 100 and interest rate information is based on loans with 80% loan-to-value ratio and points that include origination charges .
MBA’s latest forbearance and appeal volume survey estimated the total number of forbeared loans at 3.50% of service portfolio volume, down 26 basis points from the previous week. As of July 11, MBA estimates that 1.75 million owners are on a forbearance plan. By stages, 9.8 percent of the total forbearance loans are in the initial stage of the forbearance plan, while 83.4 percent are in prolongation of forbearance. The remaining 6.8 per cent is income from abstention.
The share of Fannie Mae and Freddie Mac loans in forbearance fell by 8 basis points to 1.83% of these portfolios. There was a 43 basis point drop in forborne Ginnie Mae (FHA and VA) loans to 4.36%, while the forbearance share for portfolio loans and private label securities (PLS) decreased by 61 basis points to 7.33%. The percentage of loan forbearance by independent mortgage bank (IMB) services fell 19 basis points to 3.68%, and the percentage of renegotiated loans in depository services portfolios fell 36 basis points to 3.62%.
“Abstention outflows rose again last week and new abstention requests fell to their lowest level since last March, resulting in the largest weekly drop in the abstention share since last October and the 20th.e straight week of decline, ”said Mike Fratantoni, senior vice president and chief economist of MBA. “The share of abstention has decreased for each category of investor and service.
Fratantoni added: “The latest economic data regarding the labor market and consumer spending continues to show a robust pace of economic recovery, which supports further improvements in forbearance figures as more and more homeowners are in. able to resume their payments. ”
MBA’s latest forbearance and call volume survey covers the period July 5 to July 11, 2021 and accounts for 74% of the 36.9 million loans in the service market.