Mortgage Applications Increase for Second Consecutive Week in the Week Ending May 14, 2021

According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Application Survey for the week ending May 14, 2021, the Market Composite Index, a measure of mortgage loan application volume, increased 1.2% from one week earlier. On an unadjusted basis, the Index increased 1% compared with the previous week. The Refinance Index increased 4% from the previous week but was -2% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased -4% from one week earlier. The unadjusted Purchase Index decreased -4% compared with the previous week but was 2% higher than the same week one year ago. In a statement prepared for the release of the weekly survey, Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said, “Mortgage rates increased last week, with all loan types hitting their highest levels in two weeks. Rates were still lower than levels reported in late March and early April, providing additional opportunity for borrowers to refinance. Despite the 30-year fixed rate rising to 3.15%, applications for conventional and VA refinances increased. Ongoing volatility in refinance applications is likely if rates continue to oscillate around current levels. A decline in purchase applications was seen for both conventional and government loans. There continues to be strong demand for buying a home, but persistent supply shortages are constraining purchase activity, and building material shortages and higher costs are making it more difficult to increase supply. As a result, home prices and average purchase loan balances continue to rise, with the average purchase application reaching $411,400 — the highest since February.”