While mortgage rates are still hovering just under 7%, the average fixed rate hit a six-week low this past week, leading the path to a bump in mortgage applications as February gets underway.
In the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA), mortgage applications increased 2.2% from the previous week’s 2.0% drop. The data is reported for the week ending January 31, 2025 with an adjustment for the Martin Luther King holiday.
“Mortgage rates moved lower last week, consistent with lower Treasury yields following the FOMC meeting and a volatile week for (the) stock market. The 30-year fixed rate declined to its lowest level in six weeks at 6.97%,” said Joel Kan, MBA’s vice president and deputy chief economist. “Mortgage applications responded to these lower rates and were up for the week overall, driven by a 12% increase in refinance applications, which had their strongest week since December 2024.”
According to this week’s report, the Market Composite Index, a measure of mortgage loan application volume, increased 2.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 19% compared with the previous week. The Refinance Index increased 12% from the previous week and was 17% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 4% from one week earlier. The unadjusted Purchase Index increased 15% compared with the previous week and was 0.2% higher than the same week one year ago.
Added Kan, “Purchase activity had a tougher week, with declines across all loan types. The average loan size for a purchase loan has increased since the start of the year and continued that trend last week with weaker government purchase activity, which reached $447,300, the highest level since October 2024.”
Refi’s still on the rise: The refinance share of mortgage activity increased to 39.0% of total applications from 37.1% the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 5.8% of total applications.
Check out this week’s full report here.
