Mortgage Applications Surge in Latest MBA Weekly Survey

Last Updated on January 27, 2024 by Robert C. Hoopes

Title: Mortgage Applications Show Mixed Results as Refinance Activity Declines

Introduction:

According to the latest data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey, mortgage application activity experienced both increases and declines in the past week. While purchase applications saw a notable increase, refinance applications experienced a decline. The survey, which covers a significant portion of all U.S. retail residential mortgage applications, has been conducted on a weekly basis for more than three decades.

Key Points:

1. Mortgage Applications Increase: The Mortgage Bankers Association’s survey shows that mortgage applications increased by 3.7 percent from the previous week, indicating a positive trend in the housing market.

2. Mixed Results in the Market Composite Index: The Market Composite Index, which measures mortgage loan application volume, grew by 3.7 percent on a seasonally adjusted basis. However, on an unadjusted basis, the index decreased by 4 percent compared to the previous week.

3. Decline in Refinance Applications: Refinance applications saw a decline of 7 percent from the previous week and were 8 percent lower than the same week last year. This decrease might be attributed to the rise in average contract interest rates.

4. Surge in Purchase Applications: In contrast to refinance applications, purchase applications showed an increase of 8 percent compared to the previous week. This may indicate a growing interest in the housing market among potential homebuyers.

5. Changing Landscape of Mortgage Activity: The refinance share of mortgage activity dropped to 32.7 percent from 37.5 percent in the previous week. This shift in market dynamics suggests that homeowners are becoming less inclined to refinance their mortgages.

6. Rise in Average Contract Interest Rates: Average contract interest rates for various mortgage types witnessed slight increases. 30-year fixed-rate mortgages increased to 6.78 percent, 30-year fixed-rate mortgages with jumbo loan balances rose to 6.94 percent, 30-year fixed-rate mortgages backed by the FHA increased to 6.51 percent, and 15-year fixed-rate mortgages rose to 6.31 percent. 5/1 ARMs also saw an increase to 6.22 percent.

Conclusion:

The latest Weekly Mortgage Applications Survey released by the Mortgage Bankers Association highlights a mixed performance in mortgage application activity. While purchase applications grew, refinance activity declined, suggesting a slight shift in the housing market landscape. The rise in average contract interest rates for various mortgage products may have contributed to the decrease in refinance applications. As the survey captures a significant percentage of all U.S. retail residential mortgage applications, it serves as a reliable indicator of market trends for mortgage professionals and potential homebuyers alike.