After a strong rebound at the beginning of the new year, mortgage applications continued their increase last week, albeit at a slower pace to 7.0% from one week earlier. The week ending Jan. 13 saw a 29.7% increase from the first week of the year.
These are the latest statistics from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 20, which include an adjustment for the observance of Martin Luther King, Jr. Day.
This week’s data:
- The Market Composite Index, a measure of mortgage loan application volume, increased 7.0% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index increased 1% compared with the previous week.
- The Refinance Index increased 15% from the previous week and was 77% lower than the same week one year ago.
- The seasonally adjusted Purchase Index increased 3% from one week earlier.
- The unadjusted Purchase Index decreased 1% compared with the previous week and was 39% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 31.9% of total applications from 31.2% the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 6.5% of total applications.
- The FHA share of total applications decreased to 11.9% from 13.0% the week prior.
- The VA share of total applications increased to 13.0% from 11.8% the week prior.
- The USDA share of total applications remained unchanged at 0.6% from the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.20% from 6.23%, with points increasing to 0.69 from0.67 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200)decreased to 5.92% from 6.08%, with points increasing to 0.41 from 0.40 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.22% from 6.26%, with points increasing to 1.10 from 1.05 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.54% from 5.58%, with points decreasing to 0.51 from 0.54 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 5/1 ARMs increased to 5.44% from 5.31%, with points increasing to 0.83 from 0.74 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
This week’s takeaway:
“Mortgage rates declined for the third straight week, which is good news for potential homebuyers looking ahead to the spring homebuying season. Mortgage rates on most loan types decreased last week and the 30-year fixed rate reached its lowest level since September 2022 at 6.2%,” said Joel Kan, MBA’s vice president and deputy chief economist. “Overall applications increased with both gains in purchase and refinance activity, but purchase applications remained almost 39% lower than a year ago. Homebuying activity remains tepid, but if rates continue to fall and home prices cool further, we expect to see potential buyers come back into the market. Many have been waiting for affordability challenges to subside.”
Added Kan, “Despite a 15% increase in refinances, they were still 77% behind last year’s pace, as rates remained more than two percentage points higher, thus providing very little refinance incentive for most borrowers who are locked into lower rates.”
