Mortgage applications decreased 9.0% on an adjusted basis during the week ended January 27, with applications for refinances falling 7% and applications for purchases increasing 7%, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Year-over-year, applications for refinances were down 80% compared with the same week a year earlier.
Applications for purchases were down 41% compared with the same week one year ago.
The overall decrease in applications came despite a drop in mortgage rates for a fourth straight week.
“Overall application activity declined last week despite lower rates, which is an indication of the still volatile time of the year for housing activity,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “Purchase activity is expected to pick up as the spring homebuying season gets underway, bolstered by lower rates and moderating home-price growth. Both trends will help some buyers regain purchasing power.”
“[Rates] have now fallen almost 40 basis points over the past month,” Kan says. “Treasury yields were higher on average last week, while mortgage rates decreased, which was a sign of a narrowing spread between the two.”
“The spread between mortgage rates and the 10-year Treasury has been abnormally wide since early 2022,” he adds. “Further narrowing of that spread is expected to put downward pressure on mortgage rates in the coming months.”
The refinance share of mortgage activity decreased to 31.2% of total applications , down from 31.9 percent the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 6.7% of total applications.
The average rate for a 30-year fixed-rate mortgage decreased to 6.19%.
Photo: Scott Graham