The MBA's seasonally adjusted Market Composite Index, a measure of weekly application volume based on surveys of the trade group's members, rose 3.7% for the period ending Feb. 2. The latest increase comes seven days after the index dropped 7.2%, its first decline this year. The latest index still landed 12.9% lower on an annual basis.
But loan volume has managed to head higher four out of the last five weeks, even
"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," said Joel Kan, MBA vice president and deputy chief economist, in a press release.
The seasonally adjusted Purchase Index slipped last week, though, by a seasonally adjusted 0.6% in spite of recent elevated demand, the MBA determined. But activity recovered from the previous week's more-than-11% fall, as conventional mortgages managed to eke out a small increase while government-backed lending slowed. The index was also 18.6% below year-ago levels, coming in weaker primarily due to limited for-sale inventory, Kan added.
Severe weather earlier in January likely played some role behind some of the recent slowdown in purchases, Redfin said. But early 2024 trends generally reflect sustained home buyer interest, even if it has not resulted in more lending in recent weeks, the online real estate brokerage also noted. Its home buyer demand index, which tracks requests for tours and other services provided by Redfin's agents, was up 6% on a weekly basis toward the end of January.
Buyer demand is also contributing to an acceleration of purchase-loan sizes, which came in at its highest average in eight months a week ago. In the latest survey period, the mean amount pulled back 2.1% to $434,800, still the second largest total this year, down from $444,100.
Although also subdued, the MBA's Refinance Index surged 12.3% week-over-week. Seven days earlier, volumes increased by 1.6%, and year over year, the index was flat, up by less than 1%. The refinance share relative to total activity was 35.4% rising from 34.2% in the prior survey period.
Meanwhile, the share of adjustable-rate mortgages slid down to 6.4% of volume from 6.6%.
Government-sponsored applications accounted for nearly the same percentage of activity compared to a week earlier, but shifts occurred among the sponsoring agencies. The share of
While the conforming rate edged higher, other 30-year mortgage averages decreased among MBA lenders last week. The mean 30-year jumbo mortgage clocked in at 6.88%, sliding 6 basis points from 6.94% seven days prior. Points rose to 0.47 from 0.45.
The average fixed rate of 30-year FHA-backed loans similarly slipped down to 6.57% from 6.61%. Borrowers typically used 0.84 worth of points compared to 0.79 a week earlier.
Meanwhile, the 15-year contract fixed rate increased 7 basis points to an average of 6.41% from 6.34%, while points shot up to 0.71 from 0.53 for 80% LTV-ratio mortgages.
The 5/1 adjustable-rate mortgage, which starts out fixed for 60 months before becoming variable, averaged 6.14%. The mean rate declined 9 basis points from 6.23% seven days prior. Points also decreased to 0.48 from 0.59 the previous week.
