Mortgage Application Volume Continues to Push Upward

The Mortgage Bankers Association (MBA) has reported that mortgage application volume increased 2.1% over last week, according to its Weekly Mortgage Applications Survey, for the week ending June 18, 2021. After three weeks of declines, mortgage app volume rose last week, and followed suit this week with another increase.

The refinance share of mortgage activity increased slightly to 62.5% of total application volume, up from 61.7% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.9% of total applications.

"Mortgage rates increased last week, with the 30-year fixed rate rising to 3.18%—the highest level in a month. Despite the jump in rates, refinances increased for the second consecutive week, pushed higher by a 4% bump in conventional refinance applications," said Joel Kan, MBA's Associate VP of Economic and Industry Forecasting. "Purchase applications have regained an upward trend over the past few weeks. Activity was slightly higher for the third straight week, but remained lower than the same week a year ago. Government purchase applications drove most of last week's increase, which also contributed to a slightly lower overall average purchase loan size."

The FHA share of total applications decreased to 9.5% from 9.6% the week prior. The VA share of total applications decreased to 11.2% from 11.5% the week prior. The USDA share of total applications remained unchanged from 0.5% the week prior.

Yesterday, the National Association of Realtors (NAR) reported that existing-home sales have dipped for a fourth consecutive month, by 0.9% between April and May, a trend experts attribute to low supply—which they say could improve in the coming months—and unaffordability. Still being chalked up to short supply, median home prices nationwide saw a record year-over-year increase of 23.6% in May to $350,300, while properties sold at a rapid clip of just 17 days on the market.

After last year’s pandemic and stay-in-place orders, homebuyers this year are taking advantage of purchasing a second home, as demand for second homes and vacation homes has risen according to the recently released National Association of Realtors (NAR) 2021 Vacation Home Counties Report.

The Report found that second mortgages and vacation home sales rose by 16.4%, outpacing the overall growth in existing-home sales of 5.6%. From January to April 2021, the share of vacation home sales to total existing-home sales rose to 6.7%. Vacation home sales jumped 57.2% year-over-year, compared to the 20% year-over-year growth in total existing-home sales.