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Mortgage Apps: Trend Mostly Steady Now

October 14, 2020

Bottom Line: Mortgage activity fell slightly last week, but has been broadly steady over the last month. Refinancings have ticked modestly higher as the 30-year fixed-rate mortgage has held near 3% since early August. Refinancing activity has edged modestly higher relative to purchase applications with the former now 65.6% of total applications. Overall, housing remains strong, but mortgage application volumes suggest the pace of gains has moderated in the last six to eight weeks.

The MBA Mortgage Applications Index FELL by 0.7% during the week ended October 9 to 798.9, slightly below its 13 week average of 800.6 but 36.4% ABOVE its year-ago level.

The Purchase Index FELL by 1.6% to 311.1, slightly below its 13 week average of 312.5 but 24.1% ABOVE its year-ago level.

The Refinance Index FELL by 0.3% to 3,612. With this decline, refinancing activity is slightly below its 13 week average of 3,620 but 44.2% ABOVE its year-ago level.

Contract Mortgage Rates were MIXED with the 30-year fixed rate declining by 1 bp to 3.00% and the 15-year fixed rate was unchanged at 2.59%.

Key findings of MBA's Forbearance and Call Volume Survey - September 28 to October 4, 2020

  • Total loans in forbearance decreased by 49 basis points relative to the prior week: from 6.81% to 6.32%.
    • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 9.16% to 8.27%.
    • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 4.39% to 4.03%.
    • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 10.39% to 10.06%.
  • By stage, 25.50% of total loans in forbearance are in the initial forbearance plan stage, while 72.97% are in a forbearance extension. The remaining 1.53% are forbearance re-entries.
  • Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.08% to 0.11%.
    • Weekly servicer call center volume:
    • As a percent of servicing portfolio volume (#), calls increased from 6.8% to 8.8%.
    • Average speed to answer increased from 2.3 minutes to 2.9 minutes.
    • Abandonment rates increased from 5.3% to 6.7%.
    • Average call length increased from 7.6 minutes to 7.8 minutes.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of October 4, 2020:
    • Total: 6.32% (previous week: 6.81%)
    • IMBs: 6.65% (previous week: 7.19%)
    • Depositories: 6.53% (previous week: 7.03%)
MBA's latest Forbearance and Call Volume Survey covers the period from September 28 through October 4, 2020, and represents 74% of the first-mortgage servicing market (36.8 million loans).

Article by Contingent Macro Advisors