According to findings recently released from the Mortgage Bankers Association (MBA) [1], its latest Weekly Survey showed that mortgage applications took a dive this past week (ending in August 14, 2020). Data from the survey showed a 3.3% decrease in applications from just one week prior (seasonally adjusted). Unadjusted, there was a decrease of 4%.
Also revealed by MBA were findings regarding the Refinance Index, which was shown to have decreased 5% from the week prior. When compared to this same week last year, the Refinance Index was 38% higher. MBA also reported that the Purchase Index (when seasonally adjusted) rose 1% from one week ago. Unadjusted, the was 1% lower than one week ago, and was 27% above what it was this same week last year.
Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting, commented on these findings and the current state of the housing market in general: "Positive economic data reported last week on retail sales, as well as a large U.S. Treasury auction, drove mortgage rates to their highest level in two weeks. The rise in rates dampened refinance activity, but purchase applications continued their strong run and were 27 percent higher than a year ago--the third straight month of year-over-year increases.”
Kan added: "Conventional purchase applications drove last week's increase, while applications for government loans decreased. The housing market remains a bright spot in the current economic recovery and these results, combined with July data on housing starts and homebuilder optimism, suggest that housing supply could be increasing to better meet the strong demand for buying a home."
The report also revealed what happened with rates this week, with the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) being raised to 3.13% from the previous 3.06%. As for the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400), those rose to 3.41% from the previous rate of 3.40%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA was lowered (dipping from 3.23% down to 3.16%), while the average contract interest rate for 15-year fixed-rate mortgages rose (from 2.67% to 2.73%). Finally, the average contract interest rate for 5/1 ARMs took a small dip (from 3% to 2.95%).