After some typical decreases through the holidays, mortgage applications marked a second week of increases, this week up 10.4% from last week’s increase of 9.9%, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association (MBA) for the week ending January 12, 2024. Last week’s results included an adjustment to account for the New Year’s holiday.
Key highlights from this week’s data:
- The Market Composite Index, a measure of mortgage loan application volume, increased 10.4% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index increased 26% compared with the previous week.
- The Refinance Index increased 11% from the previous week and was 10% higher than the same week one year ago.
- The seasonally adjusted Purchase Index increased 9% from one week earlier.
- The unadjusted Purchase Index increased 28% compared with the previous week and was 20% lower than the same week one year ago.
- The refinance share of mortgage activity decreased to 37.5% of total applications from 38.3% the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 5.9% of total applications.
- The FHA share of total applications decreased to 14.3% from 14.4% the week prior.
- The VA share of total applications decreased to 14.2% from 16.3% the week prior.
- The USDA share of total applications increased to 0.5% from 0.4% the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.75% from 6.81%, with points increasing to 0.62 from 0.61 (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 6.86% from 6.98%, with points decreasing to 0.42 from 0.43 (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 6.46% from 6.56%, with points decreasing to 0.80 from 0.84 (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 6.24% from 6.41%, with points increasing to 0.59 from 0.55 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 5/1 ARMs decreased to 6.14% from 6.17%, with points increasing to 0.68 from 0.56 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
MBA’s take:
“Mortgage rates declined across all loan types as Treasury yields moved lower last week on incoming inflation data, which helped to support a rise in mortgage applications. The 30-year fixed mortgage rate decreased six basis points to 6.75%, the lowest rate in three weeks,” said Joel Kan, MBA’s vice president and deputy chief economist. “Compared to a holiday-adjusted week, both purchase and refinance applications were up, and the increases were heavily driven by the conventional market. Although purchase activity is lagging year-ago levels, refinance applications have improved from their recent low point and have been showing year-over-year gains, albeit at low levels. If rates continue to ease, MBA is cautiously optimistic that home purchases will pick up in the coming months.”
