On the heels of this month’s Consumer Price Index (CPI) data, a main measure of inflation, rising for the fourth consecutive month, this week’s mortgage application data reversed course from its recent run of increases.
According to the latest Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA), home purchase applications for the week ending February 14 decreased 6.6% from one week earlier, following a recent upswing as mortgage rates had been tracking downward.
“Mortgage rates decreased on average over the week, as markets brushed off unexpectedly strong inflation data,” said Joel Kan, MBA’s vice president and deputy chief economist. “Despite mortgage rates declining, with the 30-year fixed mortgage rate dropping to 6.93%, mortgage applications decreased to their slowest pace since the beginning of the year.”
MBA reported this week’s Market Composite Index, a measure of mortgage loan application volume, decreased 6.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4% compared with the previous week. The Refinance Index decreased 7% from the previous week and was 39% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 6% from one week earlier. The unadjusted Purchase Index decreased 1% compared with the previous week and was 7% higher than the same week one year ago, according to this week’s MBA report.
“Purchase applications were down for the week, as buyers remained on the fence, although loosening inventory may help support activity in the coming months,” Kan added. “Refinance applications had been rising in previous weeks but dipped as rates remained close to 7%.”
Additional data: the refinance share of mortgage activity decreased to 38.7% of total applications from 40.2% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4% of total applications, MBA reported.
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