Mortgage Applications Decrease -2.5% in the Week Ending March 19, 2021

According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Application Survey, for the week ending March 19, 2021, the Market Composite Index — a measure of mortgage loan application volume — decreased -2.5% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased -2% compared with the previous week. The Refinance Index decreased -5% from the previous week and was -13% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 3% from one week earlier. The unadjusted Purchase Index increased 3% compared with the previous week and was 26% higher than the same week one year ago. Commenting on the third straight week of declines in mortgage applications Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said, “The 30-year fixed mortgage rate increased to 3.36% last week and has now risen 50 basis points since the beginning of the year, in turn shutting off refinance incentives for many borrowers. Refinance activity dropped to its slowest pace since September 2020, with declines in both conventional and government applications. Mortgage rates have moved higher in tandem with Treasury yields, as the outlook for the U.S. economy continues to improve amidst the faster vaccine rollout and states easing pandemic-related restrictions. Purchase applications were strong over the week, driven both by households seeking more living space and younger households looking to enter homeownership. The purchase index increased for the fourth consecutive week and was up 26 percent from last year’s pace. The average purchase loan balance increased again, both by quickening home-price growth and a rise in higher-balance conventional applications.” Kan added, “Inadequate housing inventory continues to put upward pressure on home prices. As both home-price growth and mortgage rates continue this upward trend, we may see affordability challenges become more severe if new and existing supply does not significantly pick up.”