In the past month, total mortgage activity, as measured by the Mortgage Bankers Association’s (MBA) Market Composite Index, was supported by refinancing, recovering from the relatively lower levels that were characteristic of the months prior. The gain in refinancing is owed to a sizable drop in the 30-year fixed mortgage, which decreased by 10 basis points to 3.01 percent for the week ending July 23rd and continued to decrease further in the next couple of weeks. The MBA attributes the decline in the 30-year fixed mortgage to investors’ concerns over rising COVID-19 case counts due to the Delta variant.
The Purchasing Index, on the other hand, continued trending downwards from the prior seven months.
As shown above, the Purchasing and Refinancing indexes, on an unadjusted basis, posted consistent year-over-year declines for the past four weeks. For Purchasing, the declines were single-digits, ranging from 3 to 8 percent, while the declines, for Refinancing, were about 18 percent for that period each week.
As a result of the low rates, refinancing’s share of total mortgage activity jumped from 64 percent at the end of the prior month to 67 percent, reaching as much as 68 percent two weeks ago. The adjustable-rate mortgage (ARM) share of activity continued trending downwards from prior months, reaching its lowest point since March in the latest week to 3.20 percent.