Mortgage Rates Fall; Purchase, Refi Applications Follow Suit

Mortgage Weekly Update

Mortgage rates decreased yet again — but so did applications to both buy and refinance a home.

According to the Mortgage Bankers Association, the average rate on a 30-year loan fell to 3.17% this week, down from 3.2% the week prior. Despite the slide, mortgage activity actually slipped over the week, particularly on the purchase side.

Purchase loan applications dropped 5% for the week. Here’s how Joel Kan, MBA’s associate vice president of economic and industry forecasting, explained it: “The purchase market’s recent slide comes despite a strengthening economy and labor market,” Kan said. “Activity is still above year-ago levels, but accelerating home price growth and low inventory has led to a decline in purchase applications in four of the last five weeks.”

Refinances also fell for the week, though only slightly (a mere 1%). Refinance applications have decreased in seven of the eight last weeks — a side effect of extremely low mortgage rates for nearly a year now.

As Kan puts it,  “Even with a few weeks of lower rates, most borrowers have likely already refinanced.”

More in mortgage & housing news

  • The share of mortgage loans in forbearance decreased to 4.49% of all loans this week, according to MBA. About 2.25 million homeowners are still on a forbearance plan.
  • According to the S&P CoreLogic Case-Shiller Index released this week, home prices are now up 12% over the year. They also jumped more than 1% between January and February, marking the highest month-over-month increase in 16 years.
  • MBA released its latest forecast this week and is now projecting a record-setting year for the mortgage industry. According to the trade group, originations are set to grow 16.4% this year, clocking in at around $1.67 million total by year’s end.
  • A tax credit for first-time homebuyers was introduced in the House this week. It would offer up to $15,000 for qualifying buyers.

This week in mortgage rates

Mortgage rates dropped on all loan products this week, with 15-year loans seeing the biggest slide.

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 / April 30th, 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 AlyJYale.com or on Twitter at @AlyJwriter.