MBA examines mortgage application decrease


The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey determined mortgage applications for the week ending March 26, 2021, decreased 2.2 percent from one week earlier.

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“After seven consecutive weeks of increasing mortgage rates, the 30-year fixed rate declined 3 basis points to 3.33 percent, which is still almost half a percentage point higher than the start of this year,” Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “Mortgage applications for refinances and home purchases both declined, but purchase activity was still convincingly higher than the pandemic-induced drop seen a year ago, as well as up 6 percent from the same week in March 2019. Many prospective homebuyers this spring are feeling the effects of higher rates and rapidly accelerating home prices.”

Kan noted record-low inventory is pushing home-price growth at double the rate from a year ago and above the 10 percent growth rates seen in 2005. He said the housing market is in desperate need of more inventory to cool price growth and preserve affordability.

The MBA indicated the refinance share of mortgage activity decreased to 60.6 percent of total applications from 60.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.4 percent of total applications.

“Higher mortgage rates continue to shut down refinance activity, as the pool of borrowers who can benefit from a refinance further shrinks,” Kan said.

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