Mortgage Rates Slide, Applications Jump

Mortgage Weekly Update

Mortgage activity ended its recent slump last week. According to the latest data from the Mortgage Bankers Association, applications were up 8% over the week prior. 

The bump comes after two weeks of declining loan activity and was largely due to refinancing activity, which surged 11% over the week. Purchase loan applications increased just 0.1%.

The uptick in refinancing came as mortgage rates dropped to 2.92% this week, marking the first decline in over a month.

“The one-week reversal in the recent upswing in rates drove an increase in both conventional and government refinance activity, as borrowers continue to lock in these historically low rates,”  said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Average purchase loan amounts in early 2021 continue to rise across all loan types, driven by a strong pace of home sales, tight housing inventory and high home price growth.”

Refinances are now up 59% over the year, while purchase activity is 16% higher than a year ago.

More in mortgage and housing news

  • The Department of Housing and Urban Development has officially extended the deadline by which FHA borrowers can apply for mortgage forbearance in light of COVID-19. Borrowers now have until March 31, 2021, to apply for their first forbearance period, which lasts up to 180 days. An extension forbearance period of an additional 180 days is also allowed. 
  • The share of mortgage loans in forbearance held steady at 5.38% of all loans this week, according to MBA. That amounts to around 2.7 million homeowners nationwide.
  • CoreLogic released its latest Home Price Index, and the results show a 9.2% increase in national home prices between December 2019 and December 2020. Appreciation is forecasted to slow in 2021, dropping to about 4% year’s end.
  • The national homeownership rate has officially hit 65.8%, according to the Census Bureau. That’s up over Q4 2019, but down from its 2020 peak of 67.9%. 

This week in mortgage rates

The average rate on 30-year, fixed-rate loans — both conforming and jumbo — dropped this week, though rates on other loan products rose slightly.

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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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.