The Mortgage Bankers Association (MBA) reported that there was a 0.7% decrease in mortgage application volume on a seasonally adjusted basis for the week ending on October 9, 2020 from the previous week. This was a 1% decrease on an unadjusted basis.
The Refinance Index declined by 0.3% from the week prior and the Purchase Index decreased by 2%, both on a seasonally adjusted basis.
Despite these minor decreases in loan applications, the recent loan volumes are higher than they were during this same week last year. The Refinance Index was 44% higher than it was during the same week in 2019 and the Purchase Index was 24% higher than it was a year ago.
The refinance share of mortgage activity increased by 0.2% from the week before and the “FHA share of total applications decreased to 10.7 percent from 11.0 percent the week prior.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $510,400 or less, as well as those with large loan balances greater than $510,400 both decreased slightly.
However, the average contract interest rate for 30- and 15-year fixed-rate mortgages did not change from the previous week.
Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting, says that “Mortgage applications for refinances and home purchases both decreased slightly last week,” although government mortgage applications rose by 3% and there was an “11 percent jump in VA refinance applications.”
“Refinance and purchase activity continue to run well ahead of last year's pace, fueled by record-low rates and strong homebuyer demand,” Kan says. “Housing supply is a challenge for many aspiring buyers, but activity should continue to stay strong the rest of the year."