Mortgage applications rose for yet another week, though the increase was mild compared to previous weeks’ jumps.
The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – increased by a modest 0.3%.
Adjusted purchase applications rose by 5%, while the unadjusted index slipped 31% from the week before and was 19% lower YOY. An adjustment for Thanksgiving is included in the data.
Mortgage rates slipped to 7.37%, the fourth decline in five weeks and the lowest level in 10 weeks.
“There was a slight increase in applications overall, driven by a five percent increase in purchase applications, but refinance applications decreased over the week,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.
“Rates have declined more than 50 basis points over the past six weeks, which has helped to spur a small increase in purchase applications, but activity last week was still around 20 percent lower than a year ago. The purchase market remains depressed because of the ongoing, low supply of existing homes on the market.”
At the same time, refinances tanked, down 9% from the week prior. They accounted for 30.6% of total applications. There remains a small market for them as locked-in homeowners cling to sub-5% rates. In the past decade, they averaged 58% of total activity.
“Similarly, refinance activity will likely be muted for some time, even with the recent decline in rates, as many borrowers locked in much lower rates in 2020 and 2021,” Kan added.
ARMs fell to 8.1% of total applications, coming down from a brief boost while rates neared 8%.
The FHA share of total applications fell to 13.5%, with an average interest rate of 7.18%. The VA’s share rose to 12.6% from 11.3%, while the USDA’s share increased from 0.4% to 0.5%.
The jumbo rate rose from 7.51% to 7.54%.
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