The Mortgage Bankers Association (MBA) said the volume of purchase mortgage applications declined for a second week. but refinancing has more than recovered from last week’s 7 percent loss. The MBA Composite Market Index, a measure of mortgage application volume, rose 4.6% on a seasonally adjusted basis during the week ended October 2 and was 5% higher than the previous week on an unadjusted basis.

The refinancing index rose 8 percent from the previous week and was 50 percent higher than the same week a year ago. Refinancing represented 65.4% of requests for the week, compared to 63.3% the previous week.

The seasonally adjusted buying index fell 2% from the previous week and fell 1% without adjustment. The buying volume was 21% higher than the same week a year ago.

Refi index vs 30 years Fixed

Buy index vs 30 years fixed

“Mortgage rates generally fell last week – most of them falling to record levels – and borrowers have responded. The refinancing index jumped 8% to its highest level since mid-August.” said Joel Kan, MBA associate vice president in charge of economics and industry. Forecast. “Continuing the trend observed in recent months,
the purchasing market is growing at a steady pace, with activity last week up 21% from a year ago. Average loan size increased again to a new record high of $ 371,500 as activity in the highest loan categories continues to lead the growth. “

Kan added, “There are signs that demand is declining on the entry-level portion of the market due to supply and affordability barriers, as well as the negative economic impact that the pandemic has had. on hourly workers and low and moderate income households. As a result, lower price levels grow slower, contributing to the upward trend in average loan balances. ”

The FHA share of total requests decreased to 11.0% from 11.4% the previous week while the share of VA fell from 11.9% to 12.2%. USDA claims accounted for the same 0.5% share as the week before.

As Kan said, rates have come down for all types of loans, both on a contract basis and on an actual basis. The average contractual interest rate for 30-year Fixed Rate Mortgages (FRMs) with balances at or below the compliant loan limit of $ 510,400 has decreased from 3.01% to 3.01%, with points from 0.52 to 0.37.

The 30-year jumbo FRM rate, loans with balances above the compliant limit, declined 2 basis points to 3.31%. The points went from 0.39 to 0.30.

The FHA-backed 30-year FRM had a contract rate of 3.12% with 0.32 points. The previous week, the rate was 3.15% with 0.43 points.

The average contractual interest rate for the 15-year FRM fell from 2.65% to 2.59%. Points decreased to 0.36 from 0.49.

The average contractual interest rate for 5/1 Variable Rate Mortgages (ARMs) decreased to 2.80% from 2.95%, with points decreasing from 0.55 to 0.34. ARM’s share of activity remained unchanged at 2.2% of total claims.

The MBA Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all personal loan applications in the United States. The base period and value of all indices are March 16, 1990 = 100 and interest rate information is based on loans with 80% loan-to-value ratio and points that include origination charges .

MBA’s latest forbearance and call volume survey puts the number of forbidden loans as of September 27 at 3.4 million. Total fell 6 basis points to 6.81 percent
during the previous week.

The share of Fannie Mae and Freddie Mac loans in forbearance fell for the 17theweek in a row, this time by 7 basis points, to 4.39 percent. Ginnie Mae’s forbeard loans (FHA / VA) increased 1 basis point to 9.16%, while the share of forbearance for portfolio loans and private label securities (PLS) fell by 13 basis points at 10.39%. The percentage of forbeared loans for depository agents decreased by 8 basis points to 7.03%, and the percentage of forbeared loans for independent mortgage bank (IMB) agents decreased by 4 basis points to 7, 19%.

By stage, 28.5% of total forbearance loans are at the initial stage of the abstention plan, while 70.07 percent are in an abstention extension. The remaining 1.43% is income from abstention.

“At the end of September, there was always a slow and steady decline in the share of forbearance loans – driven by constant declines in the share of GSE loans – and a consistently high amount in Ginnie Mae’s portfolio. “said Mike Fratantoni., Senior Vice President and Chief Economist of MBA.” The significant churn in the job market now, more than six months after the start of the pandemic, is still causing financial hardship for millions. Total weekly abstention requests as a percentage of service portfolio volume (#) decreased compared to the previous week: from 0.11% to 0.08%.

MBA’s latest forbearance and call volume survey covers the period September 21-27, 2020 and accounts for 74% of the prime mortgage services market (37.1 million loans).