Thanks to Declining Mortgage Rates, Refis Surge

Mortgage Weekly Update

Refinancing activity once again surged, with applications jumping 8% over last week. They’re now 50% higher than this time a year ago and at their highest level since mid-August, according to the Mortgage Bankers Association’s weekly survey. Refis accounted for more than 65% of all loan activity for the week. 

Purchase loan applications, on the other hand, went the other direction, falling 2%. Despite the dip, they’re still up 21% over last year.

According to Joel Kan, the associate vice president of economic and industry forecasting at MBA, it’s historically low interest rates that are keeping mortgage activity strong.

“Mortgage rates declined across the board last week — with most falling to record lows, and borrowers responded,” Kan said. 

The average loan size also increased this week, clocking in at $371,500. It’s the highest point on MBA’s record. And according to Kan, “activity in higher loan-size categories” is what’s driving it.

“There are signs that demand is waning at the entry-level portion of the market because of supply and affordability hurdles, as well as the adverse economic impact the pandemic is having on hourly workers and low- and moderate-income households,” he said. “As a result, the lower price tiers are seeing slower growth, which is contributing to the rising trend in average loan balances.”

More in mortgage and housing news

  • The share of mortgage loans in forbearance fell to 6.87% this week, down from 6.81% last week. About 3.4 million homeowners are still on a forbearance plan.
  • Data from the Urban Institute estimates that about 400,000 American homeowners are “needlessly delinquent” on their mortgage loans, failing to enter forbearance and, instead, falling behind on their loan payments. According to Urban’s researchers, “These borrowers may not know they are eligible for forbearance or do know, but wrongly fear having to make double payments when the forbearance period ends.”
  • A new report from Black Knight predicts a higher-than-normal mortgage delinquency rate through at least March 2022. The report also suggests we’re nearing the peak of pandemic-caused delinquencies, which have risen steadily over the last couple of months.

The week in mortgage rates

Interest rates dropped on all loan products this week, falling the most on 5/1 adjustable-rate loans.

Here’s how rates looked for each one:

  • Conforming 30-year, fixed-rate loans: 3.01%, 0.37 points
  • Jumbo 30-year, fixed-rate loans: 3.31%, 0.30 points
  • FHA 30-year, fixed-rate loans: 3.12%, 0.32 points
  • 15-year, fixed-rate loans: 2.59%, 0.36 points
  • 5/1 adjustable-rate mortgages: 2.80%, 0.34 points

Check back here next week for the latest mortgage news.

Information contained in this article may include links or references to third-party resources or content. Embrace Home Loans does not endorse or guarantee the accuracy of this third-party information. If you follow these links, you will be linking to a third party website not operated by Embrace. We are not responsible for the content of that website and its privacy & security policies may differ from those practiced by Embrace.

​This information is distributed for professional use and is not intended to be shared with, or viewed by, consumers. To the average consumer, the information here may be misleading or exclude important disclosures.

Share this:

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.