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Mortgage Apps: Jump With Lower Rates

April 21, 2021
Bottom Line:  Current coupon mortgage yields moved from a peak of 2.06% in the first days of April to 1.86% by the end of last week. Realtors reported average 30-year fixed-rates of 3.20% last week, down from a recent peak of 3.36%.  Refis jumped in response to lower rates, as did purchase volumes.  That said, it is important to note that the MBA fails to adjust for the Easter holiday, which slows activity the week before and after the weekend holiday.   Still, there were few signs of "burnout", where those who could refi already did late last year and early this year, meaning refis may be lower at a given mortgage rate in the near future than they were before.  Purchase volumes were also robust.  March new and existing home sales, due Friday and Thursday, respectively, will likely continue to show a robust housing market.

The MBA Mortgage Applications Index
ROSE by 8.6% during the week ended April 16 to 724.8,  moderately below its 13 week average of 801.6 and 5.7% BELOW its year-ago level.
The Purchase Index
ROSE by 5.7% to 295.5, slightly below its 13 week average of 297.1 but 58.5% ABOVE its year-ago level.
The Refinance Index
ROSE by 10.4% to 3,220. Despite this increase, refinancing activity is sharply below its 13 week average of 3,733 and 23.5% BELOW its year-ago level.
Contract Mortgage Rates
FELL with the 30-year fixed rate declining by 7 bps to 3.20% and the 15-year fixed rate declining by 2 bps to 2.65%.
Key findings of MBA's Forbearance and Call Volume Survey - April 5 to April 11, 2021
  • Total loans in forbearance decreased by 16 basis points relative to the prior week: from 4.66% to 4.50%.
    • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 6.33% to 6.16%.
    • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 2.52% to 2.44%.
    • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 8.65% to 8.34%.
  • By stage, 13.1% of total loans in forbearance are in the initial forbearance plan stage, while 82.1% are in a forbearance extension. The remaining 4.8% are forbearance re-entries.
  • Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained flat relative to the prior week at 0.05%.
  • Of the cumulative forbearance exits for the period from June 1, 2020, through April 11, 2021:
    • 26.7% resulted in a loan deferral/partial claim.
    • 25.6% represented borrowers who continued to make their monthly payments during their forbearance period.
    • 14.6% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
    • 14.5% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
    • 9.5% resulted in a loan modification or trial loan modification.
    • 7.4% resulted in loans paid off through either a refinance or by selling the home.
    • The remaining 1.6% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
  • Weekly servicer call center volume:
    • As a percent of servicing portfolio volume (#), calls decreased from the previous week from 8.5% to 7.9%.
    • Average speed to answer decreased from 1.8 minutes to 1.4 minutes.
    • Abandonment rates decreased from 4.9% to 4.6%.
    • Average call length remained flat at 8.0 minutes.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of April 11, 2021:
    • Total: 4.50% (previous week: 4.66%)
    • IMBs: 4.72% (previous week: 4.89%)
    • Depositories: 4.67% (previous week: 4.80%)