Mortgage applications dropped for the second straight week, this time down 4% for the week ending May 28, 2021, according to the Mortgage Bankers Association‘s weekly mortgage applications survey.
This week’s data was compared to mortgage applications from the week of Memorial Day in 2020.
The overall housing index hit its lowest point since February, said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
“Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continue to hold back purchase activity,” Kan said. “The government purchase index declined to its lowest level in over a year and has now decreased year over year for five straight weeks. Purchase applications were down almost 2% from a year ago, but that was compared to the week of Memorial Day 2020.”
Kan added that refinance activity dropped for the second straight week, even as the 30-year fixed rate decreased slightly to 3.17%.
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“Even though rates have been below 3.2% over the past month, they are still around 20 to 30 basis points higher than the record lows in late 2020,” he said.
The refinance share of activity decreased to 61.3% of total mortgage applications from 61.4% the previous week. The FHA share of total mortgage applications increased to 9.6% from 9.1% the week prior, but the VA share of total mortgage applications decreased to 10.9% from 11.2%.
Here is a more detailed breakdown of this week’s applications data:
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.17% from 3.18%
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) increased to 3.34% from 3.30%
- The average contract interest rate for 30-year fixed-rate mortgages decreased to 3.16% from 3.2%
- The average contract interest rate for 15-year fixed-rate mortgages increased to 2.56% from 2.53%
- The average contract interest rate for 5/1 ARMs decreased to 2.54% from 2.81%, with points remaining unchanged at 0.29 (including the origination fee) for 80% LTV loans.
Correction: An earlier version of this story incorrectly said the average interest rate for ARMs increased, when it decreased.
