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MBA Weekly Survey Reports a Surge in Mortgage Applications

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Last Updated on December 14, 2023 by Robert C. Hoopes

Title: Mortgage Applications See Strong Growth as Rates Hit Record Low

Date: December 15, 2023

Mortgage applications surged by 7.4 percent in the week ending December 8, 2023, according to the latest Mortgage Bankers Association’s Weekly Mortgage Applications Survey. The increase was driven by a significant rise in both refinance and purchase activity.

The Market Composite Index, which measures mortgage loan application volume, mirrored the overall growth by also rising 7.4 percent on a seasonally adjusted basis. These positive numbers indicate a healthy demand for mortgages in the current market.

Refinance activity saw a remarkable spike of 19 percent compared to the previous week, and a substantial 27 percent increase from the same period last year. This surge in refinancing applications can be attributed to the average 30-year fixed mortgage rate falling to 7.07 percent, reaching its lowest point since July.

The drop in rates prompted many homeowners to refinance their mortgages, with the majority being Federal Housing Administration (FHA) and Veterans Affairs (VA) loans. The increase in FHA and VA refinance applications highlights the benefits these programs provide in the current rate environment.

While refinance volume flourished, purchase volume faced challenges due to a lack of inventory despite the decrease in rates. The seasonally adjusted Purchase Index rose by 4 percent from the previous week, but the unadjusted Purchase Index experienced a 1 percent decline. Additionally, it was 18 percent lower compared to the same week last year.

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The refinance share of mortgage activity surged to 39.2 percent, indicating a growing interest in taking advantage of lower rates. In contrast, the adjustable-rate mortgage (ARM) share of activity decreased to 6.3 percent.

The report also revealed changes in the market shares of different types of mortgage applications. The FHA share rose to 16.1 percent, while the VA share increased to 14.2 percent. Conversely, the USDA share declined to 0.4 percent.

Furthermore, the average contract interest rates for various mortgage types demonstrated a decrease from the previous week, adding to the attractiveness of obtaining financing.

The Mortgage Bankers Association’s Weekly Applications Survey, which has been conducted since 1990, covers more than 75 percent of all U.S. retail residential mortgage applications. These latest statistics indicate a healthy and dynamic mortgage market, with a strong emphasis on refinancing, driven by historically low rates. However, the limited housing inventory continues to pose challenges for potential buyers, affecting the overall purchase volume.

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Dina J. Miller is an accomplished writer and editor with a passion for business and education. With over a decade of experience in the industry, she has established herself as a leading voice in the MBA community. Her work can be found in a variety of MBA magazines and college publications, where she provides insightful commentary on current trends and issues in the field. Dina's expertise in business and education stems from her extensive academic background. She holds a Master's degree in Business Administration from a top-tier business school, where she excelled in her studies and developed a deep understanding of the complexities of the business world. Her academic achievements have been recognized with numerous awards and honors, including induction into several prestigious academic societies.

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