The Mortgage Bankers Association’s latest Weekly Application Survey shows that, for the week ending October 16, 2020, mortgage application activity decreased by 0.6% 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, decreased by 2.1% from one week earlier, while the other, the Refinance Index, increased by 0.2%. The MBA’s tracked 30-year fixed-rate mortgage rate, increased by 2 basis points to 3.02%, the highest the survey has seen since late September.
Purchasing and Refinancing continued showing year-over-year gains, of 26% and 74%, respectively. This was the largest year-over-year gain in Refinancing in the last four weeks. The refinance share of mortgage activity increased to 66.1% of total applications from 65.6% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 1.9 percent of total applications.
The above figure shows that refinancing activity’s share of total mortgage activity when measured by dollar volume has usually lagged behind its counterpart that is measured by the number of applications. It is interesting to note, then, the instances when the percentage of refinancing by dollar volume has exceeded the percentage of refinancing by number of applications. In the current year, thus far, those occurrences have been concentrated in the first quarter.