Mortgage Applications Fell 4.1 Percent as Rates Edged Up


Mortgage application volume decreased 4.1% during the week ended February 5, as the average rate for a 30-year fixed rate mortgage increased to 2.96%, up from 2.92% the previous week, according the Mortgage Bankers Association’s (MBA) Weekly Applications Survey

Applications for refinances decreased 4% compared with the previous week while applications for purchases decreased 5%.

Year over year, applications for refinances were up 46% while applications for purchases were up 17%.

On an unadjusted basis, total volume decreased 3% compared with the previous week.

“Mortgage rates have increased in four of the first six weeks of 2021, with jumbo rates being the only loan type that saw a decline last week,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Despite some weekly volatility, Treasury rates have been driven higher by expectations of faster economic growth as the COVID-19 vaccine rollout continues.

“With the 30-year fixed rate increasing to 2.96 percent – a high not seen since last November – refinances declined, and their share of total applications dipped to the lowest level in three months,” Kan says. “Government refinance applications did buck the trend and increase, and overall activity was still 46 percent higher than a year ago. Demand for refinances is still very strong this winter.

“Purchase applications cooled the first week of February, but homebuyers are still very active,” Kan adds. “Purchase activity was 17 percent higher than last year, and the average purchase loan size continued to increase, reaching another survey high of $402,200, as the higher-priced segment of the market continues to perform well.”

The refinance share of mortgage activity decreased to 70.2% of total applications, down from 71.4% the previous week.

The adjustable-rate mortgage (ARM) share of activity increased to 2.3% of total applications.

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