After tailing off slightly last week , mortgage applications are back on the rise, as the Mortgage Bankers Association (MBA) reported  for the week ending August 6, 2021, apps increased 2.8% week-over-week.
The MBA’s Refinance Index increased 3% over the previous week, however, was 8% lower than the same week one year ago. The seasonally-adjusted Purchase Index increased 2% from one week earlier. The unadjusted Purchase Index increased 1% compared to the previous week, and was 18% lower than the same week one year ago.
The refinance share of mortgage activity increased to 68.0% of total applications from 67.6% the previous week, while the adjustable-rate mortgage (ARM) share of activity decreased to 3.2% of total applications.
"Mortgage applications rebounded last week, including an increase in purchase applications for the first time in nearly a month,” said Joel Kan , MBA's Associate VP of Economic and Industry Forecasting. “Rates slightly rose, but remained below 3%, driven by an end-of-week increase in the 10-year Treasury yield following the positive July jobs report . Homeowners continue to respond to lower rates, with refinance activity climbing to the highest level since February 2021. The refinance share of loan counts was at 68%, compared to a 63.4% share for refinances by dollar volume, as purchase loans continue to see significantly higher loan sizes."
Last week, the U.S. Bureau of Labor Statistics (BLS) reported  that total non-farm payroll employment rose by 943,000 in July, as the unemployment rate declined by 0.5 percentage point to 5.4%, with notable job gains in leisure and hospitality, in local government education, and in professional and business services. The number of unemployed persons fell by 782,000 to 8.7 million in July, down considerably from their highs at the end of the February-April 2020 recession.
The MBA also reported that this week, the FHA share of total applications decreased to 8.9% from 9.0% the week prior. The VA share of total applications decreased to 9.6% from 9.9% the week prior. The USDA share of total applications remained unchanged from 0.5% the week prior.
"The higher level of purchase activity last week was driven by more government purchase applications, including a 3.3% increase in FHA loans,” added Kan. “With low for-sale inventory keeping home-price appreciation in many markets at record highs, the jump in FHA purchase applications is potentially a sign that more first-time buyers are finding purchase options despite the high prices."
Realtor.com’s Monthly Housing Report for July 2021  found some good news for first-time buyers who have been forced out of the market due to affordability and supply issues, as new listings grew on a yearly basis for the fourth month in a row, as sellers added a higher number of smaller homes to the market. Relator.com found that the number of homes for sale declined 33.5% year-over-year in July 2021. While inventory is still lower compared to last year, the rate of decline is improving, especially at more affordable price points.