The Mortgage Bankers Association’s (MBA) latest Weekly Application Survey shows that, for the week ending January 8, 2021, mortgage application activity increased by 16.7% from the prior week on a seasonally adjusted basis, as indicated by its Market Composite Index.
One of its two constituent indexes, the Purchasing Index, increased by 8% from the previous week while the other, the Refinance Index, increased by 20%. The MBA’s tracked 30-year fixed-rate mortgage rate measure inched up by 2 basis points from the prior week to 2.88%, still just a few basis points above the record low in the series reached in mid-December 2020.
Year-over-year gains for Purchasing and Refinancing in the latest week, that is, the percentage gains in the index levels compared to the same week one year ago, showed strength at 10% and 93%, respectively. Additionally, the last full week of 2020 witnessed spikes in year-over-year gains in purchasing and refinancing activity, of 45% and 223%, respectively. The MBA cited expectations of an additional fiscal stimulus as well as an announced vaccine rollout plan generated higher rates in the latest week.
The refinance share of mortgage activity increased to 74.8 percent of total applications from 73.5 percent the previous week. On a volume-by-dollar basis, the share of the same type of mortgage activity increased from the previous week by 160 basis points to 70.6% of total applications. The adjustable-rate mortgage (ARM) share of activity decreased to 1.6 percent of total applications.