Following a steady climb earlier last month, applications for home purchases have seen the opposite these past weeks, including a usual decline over the holidays but also a continuing drop as average mortgage rates have hit their highest level since the summer.
According to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending January 3, 2025, mortgage applications decreased 3.7% from one week earlier. This week’s results include an adjustment for the New Year’s holiday.
“Applications decreased last week as rising mortgage rates continued to discourage buyers from entering the market and put a damper on purchase activity,” said Joel Kan, MBA’s vice president and deputy chief economist. “The 30-year fixed rate increased for the fourth consecutive week, reaching 6.99%–the highest rate since July 2024.”
“Purchase applications declined for both conventional and government loans and dropped to the slowest weekly pace since February 2024,” Kan added.
According to MBA, the Market Composite Index, a measure of mortgage loan application volume, decreased 3.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 47% compared with the previous week. The Refinance Index increased 2% from the previous week and was 6% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 7% from one week earlier. The unadjusted Purchase Index increased 43% compared with the previous week and was 15% lower than the same week one year ago.
Refi data: The refinance share of mortgage activity increased to 40.8% of total applications from 39.4% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.7% of total applications.
Kan added, “Refinance applications increased despite higher rates, but the increase was compared to recent low levels and was driven entirely by an increase in VA refinances, which continue to show weekly swings.”
To view the full report, click here.
