Mortgage Apps: Purchase Apps Continue Higher

Bottom Line: Purchase activity continued higher last week, confirming other signals suggesting housing activity remains the lone bright spot in the US economy. As mortgage rates have held steadily below 3.5% on 30-year fixed-rates, purchase activity has rebounded swiftly in the last four weeks. 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 to 7.91%, continuing a steady rise from 0.25% on March 2. The MBA Mortgage Applications Index ROSE by 0.3% during the week ended May 8 to 746.7, modestly below its 13 week average of 801.9 but 79.6% ABOVE its year-ago level. The Purchase Index ROSE by 10.6% to 243.3, modestly above its 13 week average of 233.2 but 9.4% BELOW its year-ago level. The Refinance Index FELL by 3.3% to 3,709. With this decline, refinancing activity is sharply below its 13 week average of 4,141 but 200.9% ABOVE its year-ago level. Contract Mortgage Rates were MIXED with the 30-year fixed rate increasing by 3 bps to 3.43% and the 15-year fixed rate declining by 1 bp to 2.92%. ______________ Key findings of MBA's Forbearance and Call Volume Survey - April 27 - May 3, 2020

• Total loans in forbearance grew relative to the prior week from 7.54% to 7.91%. In comparison, only 0.25% of all loans were in forbearance for the week of March 2.
• By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 10.45% to 10.96%.
• The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week: from 5.85% to 6.08%.
• The share of other loans (e.g. private label securities and portfolio loans) in forbearance increased relative to the prior week: from 8.30% to 8.88%
• Forbearance requests as a percent of servicing portfolio volume (#) dropped across all investor types for the fourth consecutive week relative to the prior week: from 0.63% to 0.51%.
• However, weekly servicer call center volume was up:
• As a percent of servicing portfolio volume (#), calls increased from 7.2% to 8.6%.
• Average speed to answer increased relative to the prior week from 2.4 minutes to 2.6 minutes.
• Abandonment rates increased from 5.8% to 6.6%.
• Average call length increased from 6.9 minutes to 7.4 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of May 3, 2020:
• Total: 7.91% (previous week: 7.54%)
• IMBs: 7.54% (previous week: 7.13%)
• Depositories: 8.75% (previous week: 8.41%)

MBA's latest Forbearance and Call Volume Survey covers the period from April 27 through May 3, 2020, and represents almost 77% of the first-mortgage servicing market (38.3 million loans).