Mortgage Applications Decline in the Week Ending August 13, 2021

According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Application Survey (WMAS), for the week ending August 13, 2021, the Market Composite Index (a measure of mortgage loan application volume) decreased -3.9% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased -4% compared with the previous week. The Refinance Index decreased -5% from the previous week and was -8% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased -1% from one week earlier. The unadjusted Purchase Index decreased -2% compared with the previous week and was -19% lower than the same week one year ago.

In a statement prepared for the release of this week’s WMAS, Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said, “Mortgage rates were at their highest levels in around a month, with the 30-year fixed rate increasing above 3 percent to 3.06 percent. Mortgage rates followed an overall increase in Treasury yields last week, which started higher from the strong July jobs report before slowing because of weaker consumer sentiment and concerns about rising COVID-19 cases. The increase in mortgage rates caused a 5 percent decrease in refinancing, driven by a 7 percent drop in conventional refinance applications. Even though rates are 7 basis points lower than the same week a year ago, the refinance index is around 8 percent lower. The eligible pool of homeowners who stand to benefit from a refinance is smaller now.”

Kan added, “Purchase applications also saw a mixed results, with conventional purchase applications down and government purchases up. Government purchase loans, such as FHA loans, are typically popular with first-time buyers. Despite a second-straight weekly decrease, average loan sizes remain close to record highs. This is a continuing sign that sales prices are still elevated, driven by stiff competition leading to accelerating home-price growth.”