Mortgage Apps: Holding Steady

Bottom Line: Mortgage activity was a touch stronger last week as applications for refinancings rose. The mortgage current coupon yield in the secondary market hovered around 1.40%, as Freddie Mac's commitment rate for primary market purchases averaged 2.90%. Realtors reported an average 30-year fixed-rate mortgage of 3%. While the gap between secondary and primary rates remains wide, these relationships have been mostly steady for several months. Overall, the trend in application volume has also been steady at strong levels. 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 ROSE by 1.7% during the week ended October 23 to 807.8, slightly above its 13 week average of 793.8 and 55.6% ABOVE its year-ago level. The Purchase Index ROSE by 0.2% to 305.2, modestly below its 13 week average of 311.9 but 23.5% ABOVE its year-ago level. The Refinance Index ROSE by 2.5% to 3,712. Despite this increase, refinancing activity is modestly above its 13 week average of 3,574 and 79.7% ABOVE its year-ago level. Contract Mortgage Rates FELL with the 30-year fixed rate declining by 2 bps to 3.00% and the 15-year fixed rate declining by 1 bp to 2.60%. Key findings of MBA's Forbearance and Call Volume Survey - October 12 to October 18, 2020

• Total loans in forbearance decreased by 2 basis points relative to the prior week: from 5.92% to 5.90%.
• By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 8.14% to 8.17%.
• The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.77% to 3.72%.
• The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 8.86% to 8.90%.
• By stage, 25.02% of total loans in forbearance are in the initial forbearance plan stage, while 73.14% are in a forbearance extension. The remaining 1.84% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.10% to 0.11%.
• Weekly servicer call center volume:
• As a percent of servicing portfolio volume (#), calls increased from 8.2% to 8.9%.
• Average speed to answer remained unchanged at 3.0 minutes.
• Abandonment rates decreased from 7.0% to 6.8%.
• Average call length remained unchanged at 7.6 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of October 18, 2020:
• Total: 5.90% (previous week: 5.92%)
• IMBs: 6.35% (previous week: 6.33%)
• Depositories: 5.86% (previous week: 5.93%)