Mortgage application volume increased 1.1% on an adjusted basis during the week ended Feb. 7, with applications for refinances increasing 5% and applications for purchases falling 6% compared with the previous week, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
On an unadjusted basis, total volume increased 3% compared with the previous week.
Applications for purchases increased 0.3% on an unadjusted basis and were up 16% compared with a year earlier.
“The mortgage market continues to be active in early 2020, as applications increased for the third straight week,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement.
Although the average rate for a 30-year fixed-rate mortgage increased to to 3.72%, up from 3.71%, Kan points out that rates overall “remained close to their lowest levels since October 2016.”
This resulted in applications for refinances increasing yet again.
“Refinance loan sizes also increased as a result of an active jumbo lending market,” Kan says.
Although applications for purchases fell, Kan adds that January was a strong month for purchase activity.
In fact, it was the strongest January for purchase applications since 2009, he says.
Kan speculated that “mild weather” may have “brought out prospective buyers earlier than normal.”
“Despite a decline last week, purchase activity was still up almost 16 percent from a year ago,” he says.
The refinance share of mortgage activity was 65.5% of total applications, up from 64.5% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 6.2% of total applications.