According to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA), mortgage applications increased slightly week-over-week, rising 0.3% for the week ending September 10, 2021.
The refinance share of mortgage activity decreased to 64.9% of total applications, down from 66.8% the previous week, the lowest reading since July. The adjustable-rate mortgage (ARM) share of activity increased to 3.3% percent of total applications.
MBA’s Market Composite Index, a measure of mortgage loan application volume, increased 0.3% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 10% compared with the previous week. The Refinance Index decreased 3% from the previous week, and was 3% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 8% from one week earlier. The unadjusted Purchase Index decreased 5% compared with the previous week and was 12% lower than the same week one year ago.
"Purchase applications—after adjusting for the impact of Labor Day—increased over 7% last week to their highest level since April 2021,” said Joel Kan, MBA's Associate VP of Economic and Industry Forecasting. “Compared to the same week last September, which was right in the middle of a significant upswing in home purchases, applications were down 11%—the smallest year-over-year decline in 14 weeks.”
The FHA share of total applications decreased to 9.9% from 10.9% the week prior. The VA share of total applications decreased to 10.2% from 10.4% the week prior. The USDA share of total applications decreased to 0.4% from 0.5% the week prior.
“Both conventional and government purchase applications increased, and the average loan size for a purchase application rose to $396,800,” said Kan. “The very competitive purchase market continues to put upward pressure on sales prices."
While Kan mentions the rise in average loan sizes impacting application volume, a new analysis by LendingTree has found that down payment costs and keeping pace this spike in prices is driving many first-time homebuyers away. According to Jacob Channel, a Senior Economic Analyst for LendingTree, the cheapest average down payment for a top-50 metro area was found in Oklahoma City, Oklahoma, where buyers paid an average $28,267 on a new home, representing nearly 47% of the median income for that area. The market with the highest down payment dollar value was found in San Jose, California, where the average buyer paid $115,138 or 88% of the median area income.