Thursday , 28 January 2021

MBA: First Week of 2021 Yields ‘Booming Refinance Activity’

For the week ending January 8, mortgage applications increased 16.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.

The Refinance Index increased 20 percent from the previous week and was 93 percent higher than the same week one year ago, while the seasonally adjusted Purchase Index increased 8 percent from one week earlier. The unadjusted Purchase Index increased 60 percent compared with the previous week and was 10 percent higher than the same week one year ago.

“Booming refinance activity in the first full week of 2021 caused mortgage applications to surge to their highest level since March 2020, despite most mortgage rates in the survey rising last week,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting.

The 30-year fixed rate rose two basis points to 2.88 percent, but that did not deter refinancing volumes from rising to begin the year. Both conventional and government refinance applications increased.

“Sustained housing demand continued to support purchase growth, with activity up nearly 10 percent from a year ago,” Kan adds. “The lower average loan balance observed was partly due to a 9.2 percent increase in FHA applications, which is a positive sign of more lower-income and first-time buyers returning to the market.”

The refinance share of mortgage activity increased to 74.8 percent of total applications, from 73.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 1.6 percent of total applications.

The FHA share of total applications decreased to 9.6 percent from 10.1 percent the week prior. The VA share of total applications increased to 15.8 percent from 13.6 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior.

The post MBA: First Week of 2021 Yields ‘Booming Refinance Activity’ appeared first on MortgageOrb.


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