Mortgage applications are swinging up and down, falling last week as rates posted increases.
The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – decreased by 2.3%, countering the week prior’s 3.7% rise.
Adjusted purchase applications slipped by 3%, while the unadjusted index increased by 4% and was 12% lower YOY.
Rates rose to 6.87%, their highest point since December, but have stayed in the mid-6% range since the beginning of 2024.
“Purchase applications remained subdued as elevated rates continue to add to affordability challenges along with still-low existing housing inventory. Refinance applications declined and remained depressed, with rates still higher than a year ago,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.
Refis have seen some movement since the beginning of the year, and in fact clocked a 12% boost the week prior. Last week they were down by 2%, however, accounting for 34.2% of applications. In the past decade, they averaged 58% of all activity.
Activity across the board is expected to increase as the year progresses, and consumers are starting to see the bigger picture. In Fannie Mae’s latest Home Purchase Sentiment Index, a survey-high number of consumers said they believe mortgage rates will decline in the next twelve months.
But so far, rates have oscillated in the mid-6’s, never moving much lower but occasionally spiking. Buyers with super-low pandemic-era rates may be feeling trapped in their current homes.
Strong economic data has kept rates elevated. The Fed’s preferred inflation index came in hotter than expected for January, and Wall Street pared back its bets on rate cuts from the Central Bank, now predicting they won’t come until at least May.
“The strong job market is good news for the spring buying season, as higher household incomes are a necessary component, but it also means that mortgage rates are not likely to drop much further at this point,” Mike Fratantoni, MBA’s chief economist, commented to MarketWatch.
Read More Articles:
Will Profits Continue To Drop For Sellers?
Are You Ready To Fall In Love With A Home?
One-On-One: Guild Mortgage CMO Talks About Modern Marketing
Listen To Our Podcast:
Sign up for our free newsletter.