Slight rise in rates leads to drop in mortgage applications

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The latest Mortgage Bankers Association (MBA) weekly mortgage application survey for the week ending October 1, 2021 found mortgage applications down 6.9% from the previous week . The Composite Market Index, a measure of mortgage application volume, fell 6.9% on a seasonally adjusted basis from the previous week. On an unadjusted basis, the index was down 7% from the previous week.

The refinancing index fell 10% from the previous week, down 16% from the same week a year ago.

The seasonally adjusted purchasing index was down 2% from the previous week, while the unadjusted purchasing index was down 2% from the previous week and was 13% lower than the same week a year ago.

“Mortgage applications for refinancing fell nearly 10% last week to the lowest level in three months, as the 30-year fixed rate fell to 3.14%, the highest since July. Higher rates reduce the incentive for borrowers to refinance, as declines have been observed. on all types of loans, ”said Joel Kan, associate vice president of economic and industrial forecasting at the MBA. “Purchasing activity also fell, driven by a drop in demand for conventional loans. high, higher balance demands, conventional loans still dominate the business mix.

Freddie Mac’s latest Primary Mortgage Market Survey (PMMS) found that 30-year Fixed Rate Mortgage (FRM) topped 3% to 3.01% for the week ending September 30, 2021 .

The refinancing share of mortgage activity fell to 64.5% of total applications, from 66.4% the previous week. The share of activity of adjustable rate mortgage loans (ARM) remained unchanged at 3.4% of total applications.

“As industry experts predicted, we are starting to see the refinancing market slow down and the buying market has yet to take over,” Sales Boomerang CEO Alex Kutsishin said in the report on the third quarter 2021 mortgage market opportunities of his company. “Yet the big picture indicates that we are still in the midst of a real estate boom. Many buying and refinancing opportunities remain, and our data insights point to a myriad of ways lenders can improve borrowers’ financial lives with the right loan product.

CoreLogic’s Home Price Index (HPI) and HPI forecast for August 2021 revealed that house prices hit a record high in August at 18.1%, compared to August 2020, marking the strongest growth over 12 months of the US index since the series. started (January 1976-January 1977). On a month-over-month basis, house prices were up 1.3% from July 2021. Persistent affordability issues in the tight housing supply market were also exacerbated by an influx of housing stock. ‘home buying activities by investors.

“Home prices continue to climb at a breakneck pace as a wide range of buyers drives demand for a limited supply of homes,” said Frank Martell, president and CEO of CoreLogic. large amounts of capital pursuing too few assets.

The MBA also reported that FHA’s share of total claims rose slightly to 10.5% from 10.4% the week before. VA’s share of total claims increased to 10.3% from 10.2% the previous week. USDA’s share of total claims edged up to 0.5% from 0.4% the week before.


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