After two straight weeks of increases, mortgage applications dropped 4.2% for the week ending May 21, 2021, according to the Mortgage Bankers Association‘s weekly mortgage applications survey.
“Demand is robust throughout the country, but homebuyers continue to be held back by the lack of homes for sale and rapidly increasing home prices,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
Kan noted that refinances decreased as well — by 7%, and 9% lower year over year — driven by declines in both conventional and government refinance activity.
“And purchase applications increased for the second time in three weeks, rebounding after a rather weak April with mostly weekly declines,” he said. “While purchase activity was around 4% lower than a year ago, the comparison is to last spring’s large upswing in activity as pandemic-related lockdowns lifted.”
After hovering below 3% for a month, the average 30-year fixed mortgage rate according to the Freddie Mac PMMS popped back up six basis points to exactly 3% last week. Rates climbed north of 3% over the first few months of 2021, but crested at 3.2% in March before descending again.
The refinance share of activity decreased to 61.4% of total mortgage applications from 63.3% the previous week. The FHA share of total mortgage applications decreased to 9.1% from 9.2% the week prior. The VA share of total applications decreased to 11.2% from 12%.
Here is a more detailed breakdown of this week’s mortgage applications data: