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Mortgage Apps: Purchase Apps Inch Higher Again

May 6, 2020

Bottom Line: Purchase activity inched higher for the third week. While still well below levels seen before the shutdowns for the novel coronavirus, activity is improving modestly as buyers navigate listings online and closings that can now include digital notary services in many states. The average 30-year fixed-rate mortgage held below 3.5% for the sixth straight week, dropping to 3.4%. but refinancing applications fell for the third week in a row, possibly suggesting that the highest-rated credit borrowers with an incentive to refinance have already done so.

Separately, the MBA's Forbearance and Call Volume Survey for April 13 - 19 showed that total loans in forbearance rose to 6.99% (from 0.25% on March 2). More details from the report are below.

The MBA Mortgage Applications Index ROSE by 0.1% during the week ended May 1 to 744.2, modestly below its 13 week average of 797.5 but 78.0% ABOVE its year-ago level.

The Purchase Index ROSE by 5.8% to 220.0, modestly below its 13 week average of 235.0 and 18.6% BELOW its year-ago level.

The Refinance Index FELL by 1.7% to 3,836. With this decline, refinancing activity is modestly below its 13 week average of 4,096 but 209.7% ABOVE its year-ago level.

Contract Mortgage Rates FELL with the 30-year fixed rate declining by 3 bps to 3.40% and the 15-year fixed rate declining by 5 bps to 2.93%.

Key findings of MBA's Forbearance and Call Volume Survey - April 13-19, 2020

  • Total loans in forbearance grew relative to the prior week from 5.95% to 6.99%. In comparison, only 0.25% of all loans were in forbearance for the week of March 2.
    • By investor type, Ginnie Mae loans grew the most relative to the prior week: from 8.26% to 9.73%.
    • The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week: from 4.64% to 5.46%.
    • The share of other loans (e.g. private label securities and portfolio loans) in forbearance increased relative to the prior week: from 6.43% to 7.52%.
  • Forbearance requests as a percent of servicing portfolio volume (#) dropped relative to the prior week: from 1.79% to 1.14%.
  • Weekly servicer call center volume:
    • As a percent of servicing portfolio volume (#), calls increased from 8.8% to 10.0%.
    • Hold times remained relatively flat relative to the prior week at 5.0 minutes.
    • Abandonment rates increased slightly from 9.7% to 9.9%.
    • Average call length rose for the fifth consecutive week from 7.6 minutes to 7.7 minutes.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of April 19, 2020:
    • Total: 6.99% (previous week: 5.95%)
    • IMBs: 6.52% (previous week: 5.69%)
    • Depositories: 7.87% (previous week: 6.57%)
MBA's latest Forbearance and Call Volume Survey covers the period from April 13 through April 19, 2020, and represents almost 77% of the first-mortgage servicing market (38.3 million loans).
source: https://www.mba.org/2020-press-releases/april/share-of-mortgage-loans-in-forbearance-increases-to-699

Article by Contingent Macro Advisors