While mortgage rates still hovering in the mid-sixes fluctuated little this past week, mortgage applications decreased 7.2% from one week earlier, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending January 26, 2024. Last week’s results included an adjustment to account for the MLK holiday.
Here’s a look at this week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, decreased 7.2% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index increased 8% compared with the previous week.
- The Refinance Index increased 2% from the previous week and was 3% higher than the same week one year ago.
- The seasonally adjusted Purchase Index decreased 11% from one week earlier.
- The unadjusted Purchase Index increased 6% compared with the previous week and was 20% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 34.2% of total applications from 32.7% the previous week.
- The adjustable-rate mortgage (ARM) share of activity increased to 6.6% of total applications.
- The FHA share of total applications decreased to 13.8% from 14.1% the week prior.
- The VA share of total applications decreased to 13.3% from 13.7% the week prior.
- The USDA share of total applications remained unchanged at 0.4% from the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) remained unchanged at 6.78%, with points increasing to 0.65 from 0.63 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) remained unchanged at 6.94%, with points decreasing to 0.45 from 0.46 (including the origination fee) for 80% LTV loans. The effective rate remained unchanged from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.61% from 6.51%, with points decreasing to 0.79 from 0.87 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 6.34% from 6.31%, with points decreasing to 0.53 from 0.59 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
MBA’s take:
“Mortgage rates changed little last week, with the 30-year fixed rate at 6.78%, which is close to where it has been for the past month but lower than the recent peak of 7.9% in October 2023,” said Joel Kan, MBA’s vice president and deputy chief economist. “Applications decreased compared to a holiday-adjusted week, driven by a decline in purchase applications that offset a slight increase in refinance activity. Low existing housing supply is limiting options for prospective buyers and is keeping home-price growth elevated, resulting in a one-two punch that continues to constrain home purchase activity. The average loan size for purchase applications has picked up in recent weeks to $444,100, the largest average loan size since May 2022.”
