July 27, 2021

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Mortgage News

Mortgage Application Volume Falls Despite Lower Rates

The solid 8.6 percent increase in mortgage application volume for the week ended April 16, only the fourth gain in 2021, was short-lived. The Mortgage Bankers Association reports that their Market Composite Index resumed a downward trend in the week ending April 23, although mortgage rates have fallen. The index, a measure of the volume of mortgage applications, fell by a seasonally adjusted 2.5 percent and unadjusted by 2 percent compared to the previous week.

The The refinancing index fell by 1 percent from the previous week and was 18 percent lower than the same week a year ago. Refinancing applications remain the majority; Last week’s share rose from 60.0 percent in the previous week to 60.6 percent of all applications.

The seasonally adjusted The purchasing index fell by 5 percent from a week earlier and 4 percent unadjusted. It was 34 percent higher than the same week in 2020.

Refi Index vs. 30 Years Fixed

Buy index vs. 30 years fixed

“Mortgage applications fell last week, despite mortgage rates falling for the third straight week. The 30-year fixed rate fell 3 basis points to 3.17 percent, which is still 32 basis points above the December 2020 low. Self with a few weeks of lower interest rates, most borrowers are likely to have already refinanced, so activity has declined in seven of the last eight weeks, “said Joel Kan, associate vice president of economic and industrial forecasting for MBA. “The recent decline in the shopping market can be seen in spite of a consolidating economy and an increasing labor market. Activity is still above the level of the previous year. However, the accelerated growth in home prices and low inventory levels have resulted in a decline in purchase requests in four of the last five weeks. ”

The FHA share of the total applications decreased from 11.3 percent in the previous week to 10.7 percent and the VA share from 11.5 percent to 12.2 percent. The USDA stake was unchanged at 0.4 percent. The original balances declined slightly; The average balance was $ 330,000, down $ 100 from the previous week, while purchase mortgages averaged $ 400,100 versus $ 406,100.

average contract interest rate
For 30-year fixed-rate mortgages (FRM) with origination balances at or below the corresponding limit of $ 548,250, the value decreased from 3.20 percent to 3.17 percent, with the points decreasing from 0.36 to 0.30 percent. The effective rate was 3.26 percent.

The interest rate on 30-year Jumbo FRM loans with balances above the appropriate limit fell 6 basis points to 3.28 percent, while the points rose from 0.29 to 0.30. The effective rate fell to 3.37 percent.

30 years of FHA-supported FRM had an average rate of 3.12 percent with 0.24 points. In the previous week the rate was 3.15 percent with 0.31 points. The effective rate decreased to 3.19 percent.

The rate for 15-year-old FRM fell from 2.65 percent to 2.55 percent, with the points going down from 0.41 to 0.30. The effective rate was 2.63 percent.

The 5/1 Adjustable Rate Mortgage (ARM) interest rate fell from 2.67 percent to 2.59 percent. The points decreased from 0.52 to 0.47, bringing the effective rate down to 2.76 percent. The proportion of ARM activity fell by 0.01 points to 3.5 percent of all applications.

MBA’s weekly mortgage application survey has been conducted since 1990 and covers over 75 percent of all US retail consumer applications. Respondents include mortgage lenders, commercial banks, and thrifts. The base period and value for all indices is March 16, 1990 = 100, and the interest rate information is based on loans with a credit-to-value ratio of 80 percent and points that include the origination fee.

The most recent survey of MBA’s forbearance and call volumes only found a 1 basis point improvement in the proportion of forborne loans to 4.49 percent. As of April 18, there were an estimated 2.25 million homeowners in forbearance plans. Little by little, 12.9 percent of them are in their first plan term, while 82.4 percent are in forbearance. The remaining 4.7 percent are re-entries into the various programs.

The proportion of loans from Fannie Mae and Freddie Mac remained unchanged from the previous week at 2.44 percent. Ginnie Mae’s forbearance loans (FHA and VA) declined 7 basis points to 6.09 percent, while portfolio and private label securities (PLS) leniency rates rose 8 basis points to 8.42 percent. The IMB servicer portfolio loan percentage was the same as the previous week at 4.72 percent, and the custodian servicer indulgence percentage decreased 3 basis points to 4.64 percent.

“After two weeks of sharp declines, the credit’s share of forbearance decreased for the eighth consecutive time, but only by 1 basis point. New leniency requests increased and the number of exits decreased,” said Mike Fratantoni, senior vice president and MBA from MBA Chief Economist. “More than 40 percent of borrowers in forbearance renewals have now passed the 12-month mark.”

Among homeowners who stepped out of the forbearance since June 1, 2020, a quarter of borrowers who continued their monthly payments during the forbearance were and 7.5 percent paid off their loans by either refinancing or selling the home . Another 14.4 percent restored their loans by paying back the accrued overdue amounts. Other results include 26.9 percent who accepted a deferred or partial loan, 14.6 percent who left the company with balances overdue and no loss mitigation plan, while 9.6 percent had a loan or a trial loan modification. The remaining 1.6 percent opted for repayment plans, short sales, replacement deeds, or other outcomes.

MBA’s most recent Forbearance and Call Volume Survey covers the period April 12-18, 2021 and represents 74 percent of the market for first mortgage services (37 million loans).