Mortgage Apps: Refis Rebound, Purchases Edge Higher

Bottom Line: Mortgage activity rose last week with applications for both refinancing and purchases rising. Refis saw the biggest gains, while purchase applications edged slightly higher. The trend in purchase applications had been concerning coming into the Labor Day weekend, having lost momentum from the spring and summer. While that trend will still bear close watching, it appears activity picked up again on a seasonally adjusted basis. Overall, housing remains strong, and timely, high-frequency data like application volume will remain important as we monitor the pace of those gains. The MBA Mortgage Applications Index ROSE by 6.8% during the week ended September 18 to 808.5, slightly above its 13 week average of 798.9 and 57.8% ABOVE its year-ago level. The Purchase Index ROSE by 3.4% to 327.0, modestly above its 13 week average of 311.8 and 25.1% ABOVE its year-ago level. The Refinance Index ROSE by 8.8% to 3,580. Despite this increase, refinancing activity is slightly below its 13 week average of 3,614 but 85.7% ABOVE its year-ago level. Contract Mortgage Rates ROSE with the 30-year fixed rate increasing by 3 bps to 3.10% and the 15-year fixed rate increasing by 3 bps to 2.64%. Key findings of MBA's Forbearance and Call Volume Survey - September 7 to September 13, 2020

• Total loans in forbearance decreased by 8 basis points relative to the prior week: from 7.01% to 6.93%.
• By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 9.12% to 9.15%.
• The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 4.65% to 4.55%.
• The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 10.71% to 10.52%.
• By stage, 31.65% of total loans in forbearance are in the initial forbearance plan stage, while 67.01% are in a forbearance extension. The remaining 1.34% 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 8.7% to 6.9%.
• Average speed to answer increased from 3.3 minutes to 3.5 minutes.
• Abandonment rates decreased from 7.3% to 7.0%.
• Average call length increased from 7.7 minutes to 7.8 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of September 13, 2020:
• Total: 6.93% (previous week: 7.01%)
• IMBs: 7.26% (previous week: 7.33%)
• Depositories: 7.18% (previous week: 7.21%)

MBA's latest Forbearance and Call Volume Survey covers the period from September 7 through September 13, 2020, and represents 74% of the first-mortgage servicing market (37.2 million loans).