Mortgage Rates, Applications Jump Thanks to Economic Optimism

Mortgage Weekly Update

Mortgage applications recovered slightly from last week, inching up 0.5% compared to the week prior, according to the Mortgage Bankers Association. Purchase loans increased by 2%, while refinance loans rose just 0.1%.

The news is a little surprising given the notable jump seen in rates over the week. The average rate on 30-year, fixed-rate loans rose from 3.08% to 3.23% — the highest single-week increase in almost a year.

According to Joel Kan, MBA’s associate vice president of economic and industry forecasting, the rise was due to “market expectations of stronger economic growth and higher inflation.” 

As a result of the rising rates, the share of refinances fell again for the fourth straight week. Just 67.5% of all loans were refinances — down a full percent from the week before.

The share of government loans, on the other hand, increased. FHA loans accounted for 12.1% of all mortgage applications (up from 11.2%), and USDA loans saw a 0.4% share (up from 0.3%).

More in mortgage and housing news

  • The number of mortgage loans in forbearance increased this week, jumping to 5.23% of all mortgage loans. According to MBA, an estimated 2.6 million homeowners are still on a forbearance plan.
  • The Federal Housing Finance Agency extended mortgage forbearance timelines for homeowners with Fannie Mae- or Freddie Mac-owned loans. Now, homeowners have up to 18 months forbearance (if they applied before February 28.) This matches the FHA timelines recently updated by HUD.
  • The Department of Housing and Urban Development announced a 90-day foreclosure ban on FHA borrowers impacted by the recent winter storms in Texas. Borrowers who can’t make their payments should alert their servicer if they’re affected.
  • According to a new study from, buying a home is more affordable than renting one in 15 of the top 50 metro markets. That’s up from 13 markets a year ago. 

This week in mortgage rates

Mortgage rates rose on all loan types, with 5/1 ARMs seeing the smallest increase (just 0.1 points).

Here’s how rates looked for each loan type:

Make sure to check back here next week for the latest mortgage news.

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By Aly Yale / March 5th, 2021 / Categories: / Tags:

Aly Yale

Aly J. Yale is a freelance writer focusing on real estate, mortgage, and the housing market. Her work has been featured in Forbes, Bankrate, The Motley Fool, Business Insider, The Balance, and more. Prior to freelancing, she served as an editor and reporter for The Dallas Morning News. She graduated from Texas Christian University's Bob Schieffer College of Communication with a major in radio-TV-film and news-editorial journalism. Connect with her at or on Twitter at @AlyJwriter.