Refi applications fall again

Requests for loans to buy homes are up 33 percent year-over-year: MBA

TRD NATIONAL /
Aug.August 26, 2020 09:16 AM
Mortgage Banker Association’s weekly index shows a decrease in refinance applications in the third week of August 2020 (iStock)

Mortgage Banker Association’s weekly index shows a decrease in refinance applications in the third week of August 2020 (iStock)

Refinancing activity plummeted last week while applications to purchase homes remained flat — and substantially higher than a year ago.

An index tracking the volume of mortgage applications to buy homes each week, known as the purchase index, fell 0.4 percent, seasonally adjusted, from the prior week.

The metric, from the Mortgage Bankers Association, was up 33 percent year-over-year, however, marking the 14th consecutive week of annual gains.

The year-over-year growth in applications to buy homes reflects a broad surge in demand. In July, existing home sales jumped with the median price hitting a new high of $300,000. Homebuilding also spiked — so much so that it drove up lumber prices.

An MBA index that tracks applications to refinance fell by an adjusted 10 percent compared to the second week of August, though it remained up 34 percent year-over-year.

The refi index’s fall comes as Freddie Mac and Fannie Mae’s new refinancing fee looms. The government agencies announced this month they will begin charging lenders 0.50 percent on refi loans, which MBA estimates will add $1,400 to the average homeowner’s bill. The fee was initially scheduled to take effect in September but the Federal Housing Finance Agency on Tuesday delayed implementation to December.

The average 30-year, fixed-rate mortgage fell to 3.11 percent from 3.13 percent for conforming loans. Jumbo rates were unchanged at 3.41 percent.

Because of the drop in refi activity, MBA’s index of all mortgage applications fell by a seasonally adjusted 6.5 percent from the prior week. Refinancing applications made up nearly 63 percent of the surveyed loans.

MBA’s weekly survey of mortgage applications, which dates back to 1990, covers 75 percent of the U.S. residential mortgage market.

Write to Erin Hudson at [email protected]


Related Articles

arrow_forward_ios
Tom Steyer (Getty)

Ex-candidate Tom Steyer lists SF home for $11M

Ex-candidate Tom Steyer lists SF home for $11M
Wall Street investors are prepared to buy and turn single-family homes into rentals when forbearance programs expire and homeowners look to sell. (iStock)

Wall Street investors bet on single-family rentals as mortgage payments stack up

Wall Street investors bet on single-family rentals as mortgage payments stack up
(iStock)

Landlords lost about $9B in rental payments last quarter: report

Landlords lost about $9B in rental payments last quarter: report
Fed Reserve Chairman Jerome Powell (Getty)

What low interest rates through 2023 means for real estate

What low interest rates through 2023 means for real estate
As rates hold steady at 3 percent, the average loan hit another record high: $370,200 (iStock)

Size does matter: Mortgage loan average swells to new record

Size does matter: Mortgage loan average swells to new record
Ed Adler and Wendy Silverstein (Getty)

Wendy Silverstein, Ed Adler launch loan restructuring biz

Wendy Silverstein, Ed Adler launch loan restructuring biz
Lennar's Stuart Miller, Rick Beckwitt and Jon Jaffe (Lennar; iStock)

Lennar reports untempered demand for new homes in Q3

Lennar reports untempered demand for new homes in Q3
The rates for a 30-year fixed-rate mortgage dropped 7 percentage points for the week ending September 10, reaching 2.86 percent. (iStock)

Mortgage rates notch new low

Mortgage rates notch new low
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...