Mortgage applications increased 2.7 percent from the previous week, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 22. The refinance index stayed relatively flat, decreasing only 0.2 percent from the previous week; however, it is 176 percent higher YoY. The seasonally adjusted Purchase Index increased 9 percent from the previous week.
The Breakdown – Share of Total Applications
FHA Applications – 11.2 percent, down from 11.5 percent
VA Applications – 12. percent, down from 13.4 percent
USDA Applications – 0.6 percent, down from 0.7 percent
“The housing market is continuing its path to recovery as various states reopen, leading to more buyers resuming their home search. Purchase applications increased 9 percent last week—the sixth consecutive weekly increase and a jump of 54 percent since early April. Additionally, the purchase loan amount has increased steadily in recent weeks and is now at its highest level since mid-March,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Despite mortgage rates hovering near MBA’s all-time survey low, refinance activity was essentially flat but still 176 percent higher than last year. Conventional refinance applications increased 2 percent, while government refinancing was down almost 7 percent.”
The latest Forbearance and Call Volume Survey reports that loans in forbearance have increased by 8.36 percent from the prior week as of May 17. Of all U.S. homeowners, MBA predicts that 4.2 million are now in forbearance plans. However, the picture is optimistic, as increases have been modest amidst the coronavirus pandemic.
Ginnie Mae-backed mortgages make up the largest share of loans in forbearance by investor type (11.60 percent).
“Although job losses continue at extremely high rates, mortgage servicers are reporting only modest increases in the share of loans in forbearance as of May 17,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “The decline in employment and income is hitting FHA and VA borrowers harder, leading to 11.6 percent of Ginnie Mae loans currently in forbearance.”
Added Fratantoni, “Forbearance requests declined relative to the prior week, and while call volume picked up, servicers appear well staffed for this volume, as wait times and abandonment rates dropped.”
Source: Mortgage Bankers Association