US mortgage refinancing applications fell again last week. Mortgage Bankers Association (MBA) data showed that the refinance index decreased by 4.7 percent in week ended February 12, 2021 (v -4.2 percent w/w prior). However, US mortgage refinancing applications were still up 14.0 percent year to date.
On a weekly basis basis, the two straight decline came as mortgage rates rebounded a bit. Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said “Expectations of faster economic growth and inflation continue to push Treasury yields and mortgage rates higher. Since hitting a survey low in December, the 30-year fixed rate has slowly risen, and last week climbed to its highest level since November 2020“. He added “The uptick in rates has slightly dampened refinance activity, with MBA’s index falling for the second week in a row, and the overall share dipping below 70 percent for the first time since last October.” R
On the positive side, the report pointed that “purchase activity overall is still strong – up 15 percent from last year. The average purchase loan size hit another survey high at $412,200, partly due to a larger drop in FHA applications, which tend to have smaller-than-average loan sizes.” This trend looks coherent with the sharp growth of housing prices — the largest on record, according to the latest quarterly NAR report.