The survey, which tracks the number of weekly applications for purchase and refinance mortgages, revealed that overall mortgage activity decreased by 4.5 percent from the previous week.
In addition to the decrease in overall activity, the report also revealed a decrease in purchase applications. The index for purchase activity dropped by 3 percent from the previous week and was 13.8 percent lower than it had been one year ago. The MBA cited rising home prices and limited housing inventory as the primary factors for the drop in purchase activity.
The decline in purchase applications was partially offset by an uptick in refinance applications. The refinance index was up 10 percent from the previous week and was 204 percent higher than it had been one year ago. The increase in refinance activity was attributed, in part, to the recent drop in mortgage rates. The MBA noted that the average rate for a 30-year fixed-rate mortgage had decreased to 3.03 percent, which was the lowest rate in nearly a year.
Commenting on the report, Joel Kan, MBA's associate vice president of economic and industry forecasting, stated: "Purchase applications fell last week as home prices continued to rise and housing supply remained tight. Refinance activity continues to be robust, driven by yet another dip in mortgage rates. The 30-year fixed rate dropped to its lowest level since March 2020, with activity up more than 200 percent compared to the same week a year ago."
The overall decrease in new home mortgage applications in February 2021 reflects a trend that has been observed in recent months. The combination of increasing home prices, limited inventory, and fluctuating mortgage rates has created an unpredictable and challenging market for homebuyers and homeowners looking to refinance. The data from the MBA’s Weekly Mortgage Applications Survey provides valuable insight into the state of the housing market and will continue to be monitored by industry experts in the coming months.
Analysis:
The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey revealed a decline in new home mortgage applications in February 2021. According to the survey, the overall mortgage activity decreased by 4.5 percent from the previous week, while purchase applications dropped by 3 percent and refinance activity increased by 10 percent. Rising home prices and limited housing inventory were identified as the primary factors driving the decrease in purchase applications, while the drop in mortgage rates resulted in an uptick in refinance activity.
The data from the MBA’s Weekly Mortgage Applications Survey provides valuable insight into the state of the housing market. The overall decrease in new home mortgage applications reflects the unpredictable and challenging market that has been created by increasing home prices, limited inventory, and fluctuating mortgage rates. As these factors continue to affect the market, industry experts will continue to monitor the data in order to provide more accurate guidance to prospective homebuyers and homeowners looking to refinance.
This article was contributed on Jul 26, 2023
