The Mortgage Bankers Association (MBA) reported mortgage applications fell 17.9% from the previous week for the week ending April 3, 2020.
The Refinance Index fell 19% from the prior week but is still 144% higher than the same week during 2019. Purchases were down 12% from the prior week and 33% lower than the same week a year ago.
"With much less liquidity and tighter credit in the jumbo market, average loan sizes declined, and mortgage rates for jumbo loans increased to a high last seen in January,” said Joel Kan, MBA's AVP of Economic and Industry Forecasting.
Kan also said, “Given the ongoing rate volatility, along with the persistent lack of liquidity in certain sectors of the MBS market, we expect to see continued weekly swings in refinance activity."
Refinances accounted for 74.2% of all mortgage activity, which is down from the previous week’s 75.9%.
The share of Federal Housing Administration applications increased to 10.6% from the prior week’s 9.1%. The VA had 14.3% of all applications—an increase from the previous weeks’ 12.5%.
Additionally, a study on the number for forbearance calls found the total number of loans in forbearance grew from 0.25% to 2.66% from March 2 to April 1. Mortgages backed by Ginnie Mae saw the largest growth—rising from 0.19% to 4.25%.
"MBA's survey highlights the immediate relief consumers are seeking as they navigate the economic hardships brought forth by the mitigation efforts to stop the spread of COVID-19," said Mike Fratantoni, MBA's SVP and Chief Economist. "The mortgage industry is committed to providing this much-needed forbearance as mandated by law under the CARES Act. It is expected that requests will continue to skyrocket at an unsustainable pace in the coming weeks, putting insurmountable cash flow constraints on many servicers—especially IMBs."
Fratantoni added that to ensure Americans received the support they needed, it is “incumbent” on the government to provide a lending facility to support the mortgage forbearances placed on servicers.