Mortgage application activity increased for the third consecutive week, even with rates seeing an uptick, as the purchase market sustained its early-year strength.
The Mortgage Bankers Association's Market Composite Index, a measure of weekly loan application activity based on surveys of the trade group's members, rose a seasonally adjusted 3.7% for the seven-day period ending Jan. 19. The latest movement comes
"Mortgage rates increased slightly last week, but there continues to be an upward trend in purchase activity," said Joel Kan, MBA vice president and deputy chief economist, in a press release.
The contract rate for 30-year fixed mortgages with conforming balances climbed up 3 basis points to 6.78% from 6.75% in the prior survey. Borrowers took out 0.63 in points to
After hitting its highest mark since June a week earlier, the seasonally adjusted Purchase Index surged another 7.5%, but compared to the same survey period of 2023, volumes were 17% lower, with inventory still limited.
Conventional and Federal Housing Administration-backed purchase applications drove most of last week's purchase activity "as some buyers moved to act early this season," Kan said. Elevated conventional activity, though, also helped push the average purchase-loan size to its highest point since last July at $425,100, jumping up as
The Refinance Index, on the other hand, declined 7% from one week earlier, erasing some of its recent gains. Compared to year-ago levels, the index was 8.5% lower.
Refinance volume relative to total activity also shrank to 32.7% from 37.5% seven days earlier. "There is still little incentive for homeowners to refinance with rates at these levels," Kan said.
Despite the pick-up in FHA-backed purchases, the share of government-guaranteed applications decreased overall from the prior survey. The portion of FHA-sponsored lending shrank to 14.1% from 14.3% the prior week, while mortgages backed by the Department of Veterans Affairs fell to a 13.7% share from 14.2%. Applications coming through U.S. Department of Agriculture programs managed to inch up to 0.5% of total volume, up from 0.4% seven days earlier.
Average interest rates among MBA lenders increased across all categories measured by the association, as investors pulled back on some of the enthusiasm displayed in the previous two months that had brought relief for borrowers.
The contract fixed rate of the 30-year jumbo mortgage with balances above conforming amounts jumped 8 basis points to average 6.94%. One week earlier, the jumbo rate came in at 6.86%. Points increased to 0.46 from 0.42 in the previous survey.
The average contract rate of the 30-year fixed FHA-backed loan rose to 6.51% from 6.46% week over week. Borrower points also climbed up to 0.87 from 0.8 for 80% LTV-ratio loans.
The average 15-year contract fixed rate similarly increased 7 basis points to 6.31% from 6.24%. Points were unchanged from the prior week, sitting at 0.59.
Meanwhile, the 5/1 adjustable-rate mortgage finished the week at an average of 6.22%, an 8 basis point upturn from 6.14% seven days earlier. Points used on the loans, which start out fixed for 60 months before adjusting to market rates, decreased to 0.49 from 0.48.
At the same time, the share of adjustable-rate mortgage applications relative to overall activity grew to 6.3% from 5.9% in the previous survey.
