The Mortgage Bankers Association’s latest Weekly Application Survey shows that, for the week ending October 30, 2020, mortgage application activity increased by 3.8% 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 0.1% from the previous week while the other, the Refinance Index, increased by 6.4%. The MBA’s tracked 30-year fixed-rate mortgage rate measure increased by one basis point from the prior week to 3.01%.
Purchasing and Refinancing continued showing year-over-year gains, of 25% and 88%, respectively. This was the largest year-over-year gain for refinancing in 3 ½ months. Purchasing gains this week marked the 24th straight week of year-over-year gains. The refinance share of mortgage activity increased to 68.7% of total applications from 66.7% in the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 2.1 percent of total applications.
As a sign of housing strength, the data of year-over-year percentage changes of the MBA’s Purchasing Index show an upward trajectory since the beginning of 2019, when using a four-week rolling average, as shown below. This trend maintained in spite of the disruption occurring in the spring of 2020.
From its significant dip in March and April, the months in which the novel coronavirus, COVID-19, took foot in the United States, the Index rebounded sharply in May and maintained roughly the same rate of growth as it had prior to the pandemic’s onset.