U.S. Mortgage Refinancing Index Fell For The Third Straight Week

U.S. mortgage refinancing index fell for the third straight week. Mortgage Bankers Association (MBA) data showed that the refinance index decreased by 11.3 percent in week ended February 19, 2021 (v -4.7 percent w/w prior). However, U.S. mortgage refinancing applications were still up 1.2 percent year to date.

On a weekly basis basis, the third straight decline came as 30-year mortgage rates rebounded to the highest level since September 2020. According to the report, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) jumped to 3.08 percent, up from 2.98 percent the prior week. In the meantime, the average contract interest rate for 15-year fixed-rate mortgages rose to 2.56 percent, up from 2.47 percent the prior week.

Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said “Mortgage rates have increased in six of the last eight weeks, with the benchmark 30-year fixed rate last week climbing above 3 percent to its highest level since September 2020. As a result of these higher rates, overall refinance activity fell 11 percent to its lowest level since December 2020“. He added “the severe winter weather in Texas affected many households and lenders, causing more than a 40 percent drop in both purchase and refinance applications in the state last week.”