Refinancing pushed the volume of mortgage loan applications to one of its biggest week-over-week increases in ten months, during the period that ended February 3. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, jumped 7.4 percent on a seasonally adjusted basis from one week earlier and was 8.0 percent higher on an unadjusted basis. The Refinance Index was 18.0 percent higher than the previous week and the refinance share of application activity rose to 33.9 percent from 31.2 percent. Volume, however, is still 75 percent lower than the same week one year ago when the share of applications was at 56.2 percent.
The seasonally adjusted Purchase Index gained 3.0 percent week-over-week and was 4 percent higher on an unadjusted basis. Volume was down 37 percent from the same week in 2022.
“Applications rose last week as the 30-year fixed mortgage rate inched lower to 6.18 percent, its fifth consecutive weekly decline. The 30-year fixed rate is almost a percentage point below its recent high of 7.16 percent in October 2022,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Both purchase and refinance applications increased last week and have shown gains in three of the past four weeks because of lower rates.
Overall applications remained 58 percent lower than a year ago and rates are still significantly higher, however, this week’s results are a step in the right direction. Purchase activity that was put on hold last year due to the quick runup in rates is gradually coming back as rates ease and housing demand remains strong, driven by supportive demographics and the ongoing strength in the job market. ”