Mortgage Apps: Purchase Apps Continue Higher

Bottom Line: Purchase activity rose for the fifth consecutive week, confirming other signals suggesting housing activity remains the lone bright spot in the US economy. The average 30-year fixed-rate mortgage held below 3.5% for the eighth straight week amid Federal Reserve support for the secondary mortgage market via purchases of agency mortgage-backed securities. Moreover, buyers, sellers, and agents are likely becoming more adept at navigating listings online and closings that can now include digital notary services in many states. The refinancing index, meanwhile, has trended steadily lower since peaking in late March. The share of high-quality borrowers with rates much above the current prevailing rates is historically low. And more moderate credit borrowers are facing tighter credit conditions. Separately, the MBA's Forbearance and Call Volume Survey for April 27 - May 3 showed that total loans in forbearance rose modestly in the last week. On the plus side, servicers report lower call volume related to forbearance inquiries. The MBA Mortgage Applications Index FELL by 2.6% during the week ended May 15 to 727.1, sharply below its 13 week average of 808.2 but 70.8% ABOVE its year-ago level. The Purchase Index ROSE by 6.4% to 258.9, sharply above its 13 week average of 233.2 but 1.6% BELOW its year-ago level. The Refinance Index FELL by 6.3% to 3,474. With this decline, refinancing activity is sharply below its 13 week average of 4,187 but 160.3% ABOVE its year-ago level. Contract Mortgage Rates FELL with the 30-year fixed rate declining by 2 bps to 3.41% and the 15-year fixed rate declining by 4 bps to 2.88%. ______________ Key findings of MBA's Forbearance and Call Volume Survey - May 4 to May 10, 2020

• Total loans in forbearance grew relative to the prior week from 7.91% to 8.16%. This 25 basis point weekly increase was the smallest increase reported since the week of March 16.
• By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 10.96% to 11.26%.
• The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week: from 6.08% to 6.25%.
• The share of other loans (e.g., private-label securities and portfolio loans) in forbearance increased relative to the prior week: from 8.88% to 9.26%.
• Forbearance requests as a percent of servicing portfolio volume (#) dropped across all investor types for the fifth consecutive week relative to the prior week: from 0.51% to 0.32%.
• Weekly servicer call center volume dropped back down this week:
• As a percent of servicing portfolio volume (#), calls decreased from 8.6% to 7.8%.
• Average speed to answer decreased relative to the prior week from 2.6 minutes to 2.0 minutes.
• Abandonment rates decreased from 6.6% to 5.3%.
• Average call length decreased - from 7.4 minutes to 6.7 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of May 10, 2020:
• Total: 8.16% (previous week: 7.91%)
• IMBs: 7.85% (previous week: 7.54%)
• Depositories: 8.99% (previous week: 8.75%)