E Economics

U.S. Mortgage Refinancing Index Fell To A 5-Month Low

11 March, 2021
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U.S. mortgage refinancing index fell four out of the last five weeks. Mortgage Bankers Association (MBA) data showed that the refinance index decreased by 5.0 percent in week ending March 5, 2021 (v +0.1 percent w/w prior) to the lowest since October 2020. As a result, U.S. mortgage refinancing applications were down 3.8 percent year to date. Refinancing comprised 64.5% of total mortgage applications last week (down from 67.5% prior), the lowest share since September 2020.

 

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The decline came as the 30-year mortgage rates jumped to 3.26 percent last week (up from 3.23 percent prior), which is the highest since July 2020 and up 40 basis points since the start of 2021. Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said “The run-up in mortgage rates continues to cool demand for refinance applications.

 

Concerns over the potential for higher inflation, a strong economic recovery and a massive federal government deficits have pushed Treasury yields higher. In this context, it seems that the bottom is probably behind us.