Mortgage applications increased 1.2% on a seasonally adjusted basis from one week ago, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 6.
On an unadjusted basis, the index increased 48% compared with the previous week. The Refinance Index increased 5% from the previous week and was 86% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 1% from one week earlier. The unadjusted Purchase Index increased 47% compared with the previous week and was 44% lower than the same week one year ago.
“Mortgage rates declined last week as markets reacted to data showing a weakening economy and slowing wage growth,” says Joel Kan, MBA’s Vice President and Deputy Chief Economist. “All loan types in the survey saw a decline in rates, with the 30-year fixed rate falling to 6.42 percent. Purchase applications continued to be hampered by broader weakness in the housing market and declined slightly over the week, with the index slipping to its lowest level since 2014.
“There was an increase in refinance activity as a result of the 16-basis-point decline in rates, as both conventional and government refinance applications increased,” continues Kan. “However, the overall pace of refinance applications was lower than November and December’s 2022 averages, and over 80 percent lower than a year ago. Refinances were about 30 percent of all applications last week – well below the past decade’s average of 58 percent.”
The refinance share of mortgage activity increased to 30.7% of total applications from 30.3% the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 7.3% of total applications.
The FHA share of total applications decreased to 13.4% from 14.0% the week prior. The VA share of total applications decreased to 13.2% from 13.4% the week prior. The USDA share of total applications remained unchanged at 0.6% from the week prior.