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Mortgage Apps: Mostly Steady

July 29, 2020

Bottom Line: The 30-year fixed-rate mortgage held below 3 1/4% last week, averaging 3.20% for the second straight week. Mortgage application volumes were mostly steady . Refis are well off their highs but are still trending higher as Federal Reserve buying in the secondary market has reduced volatility and slowly given mortgage bankers confidence to push primary market rates closer to secondary market rates. Since the highs of November 2018, mortgage rates are down nearly 200bps. Purchase applications are also still technically in an uptrend, but the momentum has slowed notably in recent weeks. That loss of momentum bears watching, especially since new lows in mortgage rates during the summer selling season should spur an acceleration in the trend.

Separately, the MBA's Forbearance and Call Volume Survey showed a sixth straight week of declines in total loans in forbearance.

The MBA Mortgage Applications Index FELL by 0.8% during the week ended July 24 to 841.9, moderately above its 13 week average of 779.1 and 73.9% ABOVE its year-ago level.

The Purchase Index FELL by 1.5% to 306.1, modestly above its 13 week average of 292.5 and 21.0% ABOVE its year-ago level.

The Refinance Index FELL by 0.4% to 3,956. With this decline, refinancing activity is moderately above its 13 week average of 3,611 and 120.9% ABOVE its year-ago level.

Contract Mortgage Rates were MIXED with the 30-year fixed rate unchanged at 3.20% and the 15-year fixed rate increasing by 5 bps to 2.76%.

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

  • Total loans in forbearance decreased by 6 basis points relative to the prior week: from 7.80% to 7.74%.
    • By investor type, the share of Ginnie Mae loans in forbearance increased: from 10.26% to 10.27%.
    • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 5.64% to 5.49%.
    • The share of other loans (e.g., portfolio, and PLS loans) in forbearance increased relative to the prior week: from 10.41% to 10.53%.
  • Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained flat relative to the prior week at 0.13%.
  • Weekly servicer call center volume:
    • As a percent of servicing portfolio volume (#), calls increased for the third week from 8.3% to 9.0%.
    • Average speed to answer remained flat relative to the prior week at 2.6 minutes.
    • Abandonment rates decreased from 7.2% to 6.8%.
    • Average call length decreased from 7.6 minutes to 7.2 minutes.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of July 19, 2020:
    • Total: 7.74% (previous week: 7.80%)
    • IMBs: 7.85% (previous week: 7.83%)
    • Depositories: 8.06% (previous week: 8.23%)
MBA's latest Forbearance and Call Volume Survey covers the period from July 13 through July 19, 2020, and represents 75% of the first-mortgage servicing market (37.3 million loans).

Article by Contingent Macro Advisors