Mortgage applications rose 2.2% from last week, according to the Mortgage Bankers Association (MBA)'s Weekly Application Survey for the week ending on January 31, 2025.
The week’s results for the application index, adjusted for the Martin Luther King holiday, increased 19% compared to the week prior. The refinance share of applications rose 12% within a week, and is up 17% from the same week last year.
The surge in activity was likely kickstarted by a slight decline in mortgage rates in the final week of January, which is 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 percent,” Kan said, which explains the 12% surge in refinances for that week — the strongest week it’s had since December 2024.
The outlook wasn’t as sunny for the purchase share of applications. The seasonally adjusted purchase index fell 4% from the previous week, and on an unadjusted basis, the purchase index rose 15% from the previous week — only 0.2% higher than the same week a year ago.
“Purchase activity had a tougher week, with declines across all loan types,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “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.”
The refinance share of mortgage activity increased to 39% of total applications from 37.1% the week prior. Elsewhere, as Kan pointed out, loan activity was sluggish.
Activity Across Loan Types:
- The adjustable-rate mortgage (ARM) share of activity remained unchanged at 5.8% of total applications.
- The FHA share of total applications fell to 16.2% from 16.7% the week prior.
- The VA share of total applications increased to 13.3% from 13.2% the week prior.
- The USDA share of total applications remained unchanged at 0.5% from the week prior.
Avg. Contract Interest Rate (80% LTV):
- For conforming, 30-year fixed-rate mortgages ($766,550 or less), the contract interest rate declined to 6.97% from 7.02%, with points increasing to 0.64 from 0.63 (including the origination fee).
- For jumbo, 30-year fixed-rate mortgages (greater than $766,550), the contract interest rate decreased to 7.01% from 7.02%, with points decreasing to 0.48 from 0.57.
- For FHA, 30-year fixed-rate mortgages, the contract interest rate fell to 6.69% from 6.72%, with points decreasing to 0.84 from 0.94.
- For 15-year fixed-rate mortgages, the contract interest rate declined to 6.36% from 6.37%, with points decreasing to 0.69 from 0.74.
- For 5/1 ARMs, the contract interest rate fell to 6.07% from 6.44%, with points increasing to 0.64 from 0.62.
