Mortgage applications in the US fell again this week. The weekly MBA Mortgage Index fell 0.6% to follow last week’s 4.0% fall. The Purchase Index fell 3.3% while the Refinance Index rose 2.2% as mortgagees moved on rate expectations.
From the U.S. Mortgage Bankers Association for the week ending 22 October 2021
- Applications to purchase a home -0.6% v -4.0% prior
- MBA 30-Yr Mortgage Rate w/e 3.27% (Prev. 3.3%)
- Mortgage Market Index w/e 588.4 (Prev. 591.7)
- MBA Purchase Index w/e 287.5 (Prev. 297.2)
- Mortgage Refinance Index w/e 2402.7 (Prev. 2350.5)
“Mortgage applications fell last week, driven by a 3 percent decline in purchase applications. Both conventional and government purchase applications were down, while the average purchase loan increased for the second straight week to $416,200 – the second highest amount ever. The elevated loan size is an indication that activity is more on the higher end of the market,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
“Home-price appreciation growth remains faster than historical averages and inventory, particularly for starter homes, continues to trail strong demand.”
Added Kan, “The 30-year fixed rate decreased to 3.27 percent – its lowest level in four weeks – and helped spur an increase in refinances across all loan types. FHA and VA refinances jumped 4 percent and 12 percent, respectively.”
The refinance share of mortgage activity increased to 65.2 percent of total applications from 63.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 3.4 percent of total applications.
The Federal Reserve as widely expected at its last meeting increased the taper of its purchases of mortgage-backed bonds. The QE Taper doubled in pace of Treasuries $20B per month as expected, and MBS $10B per month as expected. Dot plot shows three hikes in 2022 vs two hikes expected. That should send rates even higher.
Source: MBA’s Weekly Applications Survey
From The TradersCommunity News Desk