Mortgage applications

Demand was strongest at the high end of the market, which pushed loan amounts up for the fourth straight month.

A spike in government-sponsored applications helped lead indexes to their largest gains in several weeks.

Purchase loans tick upward, even as housing demand pushes prices well above 2020 levels.

The MBA’s Market Composite Index decreased a seasonally adjusted 4% last week, dropping to a point not seen since February 2020.

While purchases increased, refinancing activity slowed considerably compared to its pace over the past month.

Average loan size also continues to increase, as demand remains high and costs in homebuilding materials rise this year.

Mortgage lenders have much riding on a yearslong effort to overhaul a program that requires homeowners to hold policies in flood-prone areas. A congressional panel meeting to discuss the issue was once again split between lawmakers from storm-threatened states and those concerned about government costs.

Purchase loan volume also increased, as borrowers tried to take advantage of rate dips across all loan types

The recent increase in loan size across all application types reflects rising prices, which contributed to a drop in applications, Mortgage Bankers Association economist Joel Kan said.

After a one-week reprieve, mortgage activity waned again with decreased demand for refinances and extremely low inventory for homebuyers.

While purchase volume is seeing its usual seasonal pickup, lower rates caused a spike in activity among existing homeowners looking to refinance.

And with demand far outweighing supply, the average new-home purchase loan ascended to another record high.

But the percentage of weekly applications in that category was closer to 60%, the Mortgage Bankers Association found.

Mortgage rates that are rising in tandem with a recovering economy dampened borrower activity, even with prime homebuying season underway.

While there were fewer new mortgages sought on a week-to-week basis, the index was higher than it has been during the same week in the last two years.

Despite a 3% increase in new mortgages, overall applications dropped 2% on a consecutive-week basis due to a 5% decline in refis, according to the Mortgage Bankers Association.

While the economic recovery and stimulus checks drove upward movement in purchases, it wasn’t enough to offset tumbling refinance activity.

“Builders continue to be confronted with rising input costs and a lack of available lots, causing them to slow production,” MBA’s Joel Kan said.

Severe winter weather and another hike in mortgage rates stifled loan volume for the week, according to the Mortgage Bankers Association.

But the average amount for a purchase loan increased to an all-time high, showing the upper end of the housing market remains strong.