Steady rates remaining in the low 6% range continue fueling refinance demand, rising the tide for a small increase this week in overall mortgage applications, as tracked by the Mortgage Bankers Association (MBA).
According to the latest Market Composite Index—MBA’s measure of mortgage loan activity volume and includes purchases and refinances—increased 2.8% on a seasonally adjusted basis from last week’s 0.3% decrease, for the week ending Feb. 13. On an unadjusted basis, the Index increased 5% compared with the previous week.
MBA’s seasonally adjusted Purchase Index (measuring purchases of single-family homes only) decreased 2% from the previous week and the unadjusted Purchase Index increased 4% compared to the previous week and was 4% higher than the same week a year ago, according to this week’s report.
“Mortgage applications rose last week as the lowest rates in four weeks helped to revive some refinance activity,” said Joel Kan, MBA’s vice president and deputy chief economist. “Treasury yields ended the week lower as weaker data on retail sales and home sales outweighed better-than-expected readings on the job market for January. Mortgage rates moved lower with the 30-year fixed rate decreasing to 6.17 percent, and all other loan types in the survey also declined. Refinance applications increased across all loan types, marking the strongest week for refinancing since mid-January. There was a drop in purchase applications overall, although VA purchase applications bucked the trend and increased four percent.”
MBA’s report shows the refinance share of mortgage activity increased to 57.4% of total applications from 56.4% the previous week. The Refinance Index—measuring the total volume of mortgage applications for refinancing existing homes—increased 7% from the previous week and was 132% higher than the same week one year ago.
The government-backed loans were mixed this week, with the FHA share of total applications remaining unchanged at 18.4% the week prior; the VA share of total applications increased 16.5% from 16.0% the week prior and the USDA share of total applications remaining unchanged at 0.4% from the week prior.
MBA’s seasonally adjusted Purchase Index, measuring single-family home purchase applications, decreased 3% from one week earlier. The unadjusted Purchase Index increased 3%compared with the previous week and was 8% higher than the same week one year ago.
To view the full report, click here.
