In the latest data released by the Mortgage Bankers Association (MBA), mortgage applications saw an increase of 3.7% from the previous week.
The Market Composite Index, which serves as a gauge of mortgage loan application volume, demonstrated a 3.7% rise on a seasonally adjusted basis compared to the previous week. On an unadjusted basis, the Index surged by 8% in comparison to the prior week.
Meanwhile, the Refinance Index experienced a notable uptick of 12% from the preceding week and marked a 1% increase compared to the same week last year. However, the seasonally adjusted Purchase Index witnessed a slight dip of 1% from the previous week. On an unadjusted basis, the Purchase Index showcased a healthy 6% increase compared to the previous week, although it remained 19% lower than the same period a year ago.
“Mortgage rates have stayed close to where they started the year, despite swings in Treasury yields because of slowing inflation offset by stronger than expected readings on the job market. The 30-year fixed mortgage rate was 6.8%, a slight increase from last week,” said Joel Kan, MBA’s deputy chief economist. “Rates at these levels have not prompted much of a reaction in the refinance market, as most homeowners have mortgages with much lower rates. However, purchase activity has been strong to start 2024 compared to the final quarter of 2023. However, activity is still weaker than a year ago because of low housing supply.”
Regarding the composition of mortgage activity, the refinance share increased to 35.4 % of total applications from 34.2% in the prior week, while the adjustable-rate mortgage (ARM) share decreased to 6.4%.
The FHA share of total applications decreased slightly to 13.1% from 13.8% in the previous week, whereas the VA share increased to 14.1% from 13.3%. The USDA share remained unchanged at 0.4%.
In terms of interest rates, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased slightly to 6.80%, while the average rate for jumbo loan balances decreased to 6.88%. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.57%.
Additionally, the average contract interest rate for 15-year fixed-rate mortgages rose to 6.41%, and the average rate for 5/1 adjustable-rate mortgages (ARMs) decreased to 6.14%.
