The Mortgage Bankers Association's latest Weekly Mortgage Applications Survey for the week ending May 7, 2021 shows mortgage applications increased 2.1 percent from one week earlier.
The Market Composite Index, a measure of mortgage loan application volume, increased 2.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2 percent compared with the previous week.
The Refinance Index increased 3 percent from the previous week and was 12 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 13 percent higher than the same week one year ago.
"Mortgage rates fell last week to the lowest levels since February, tracking the dip in Treasury yields. The decline in rates helped the refinance index reach its highest level in eight weeks, driven by a 4 percent increase in conventional refinances. Additionally, refinance loan balances increased for the fourth straight week, an indication that higher-balance borrowers acted to take quick advantage of lower rates," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "The first week of May was also strong for the purchase market. Applications were up 13 percent from a year ago, which was around the time the housing market awakened from the pandemic-induced stall in activity. Most markets this spring continue to see robust demand, but activity continues to be constrained by insufficient inventory levels, as well as homebuilder challenges related to the ongoing shortages and price increases for building materials."
The refinance share of mortgage activity increased to 61.3 percent of total applications from 61.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 3.8 percent of total applications. The FHA share of total applications decreased to 9.9 percent from 10.1 percent the week prior. The VA share of total applications decreased to 11.7 percent from 11.9 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.11 percent from 3.18 percent, with points decreasing to 0.32 from 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.27 percent from 3.31 percent, with points increasing to 0.34 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.