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Mortgage Apps: Holding Steady

October 21, 2020

Bottom Line: Mortgage activity was nearly down just slightly last week as purchase applications fell slightly while refinancings inched higher. The Freddie Mac 30-year mortgage survey rate fell to 2.81%, but realtors reported that their clients averaged 3.02% as borrowers with less than perfect credit saw higher rates. The trend in application volume has been broadly steady over the last month. 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 0.6% during the week ended October 16 to 794.2, slightly below its 13 week average of 796.4 but 53.9% ABOVE its year-ago level.

The Purchase Index FELL by 2.1% to 304.6, modestly below its 13 week average of 312.0 but 26.0% ABOVE its year-ago level.

The Refinance Index ROSE by 0.2% to 3,621. Despite this increase, refinancing activity is slightly above its 13 week average of 3,593 and 74.3% ABOVE its year-ago level.

Contract Mortgage Rates ROSE with the 30-year fixed rate increasing by 2 bps to 3.02% and the 15-year fixed rate increasing by 2 bps to 2.61%.

Key findings of MBA's Forbearance and Call Volume Survey - October 5 to October 11, 2020

  • Total loans in forbearance decreased by 40 basis points relative to the prior week: from 6.32% to 5.92%.
    • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 8.27% to 8.14%. The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 4.03% to 3.77%.
    • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 10.06% to 8.86%.
    • By stage, 26.32% of total loans in forbearance are in the initial forbearance plan stage, while 72.08% are in a forbearance extension. The remaining 1.60% are forbearance re-entries.
  • Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.11% to 0.10%.
  • Weekly servicer call center volume:
    • As a percent of servicing portfolio volume (#), calls decreased from 8.8% to 8.2%.
    • Average speed to answer increased from 2.9 minutes to 3.0 minutes.
    • Abandonment rates increased from 6.7% to 7.0%.
    • Average call length decreased from 7.8 minutes to 7.6 minutes.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of October 11, 2020:
    • Total: 5.92% (previous week: 6.32%)
    • IMBs: 6.33% (previous week: 6.65%)
    • Depositories: 5.93% (previous week: 6.53%)
MBA's latest Forbearance and Call Volume Survey covers the period from October 5 through October 11, 2020 and represents 75% of the first-mortgage servicing market (37.3 million loans).

Article by Contingent Macro Advisors