The latest results from the Mortgage Bankers Association’s (MBA) Weekly Application Survey for the week ending September 4 show an increase of 2.9% in the Market Composite Index from the previous week on a seasonally adjusted basis. Purchasing and refinancing activity increased from the previous week by 2.6% and 3%, respectively. MBA’s tracked contract rate of the 30-year fixed-rate mortgage dipped by one basis point to 3.07%, hovering just one basis point above the record low reached in the beginning of August.
As shown above, the year-over-year percentage gains in Purchasing and Refinancing in the latest week were 40% and 60%, respectively, on a non-seasonally adjusted basis. Refinancing activity was buoyed up by the start of mid-August when the FHFA announced that it would defer its previously announced “adverse market fee”, to take place at the beginning of September, to December 1. This fee would assess 0.5% on account of the economic uncertainty created by the current pandemic to all refinanced mortgages acquired by Fannie Mae and Freddie Mac that would be subsequently securitized.
The refinancing share of applications increased in the previous week from 62.5% of all applications to 63.1%. The MBA cites a noteworthy 5-basis-point decrease in the 15-year fixed rate to a new record low of 2.62 percent. The drop in rates led to a rebound in refinancing activity, driven mainly by borrowers applying for conventional loans.