Mortgage application volume fell 3.0% during the week ended January 25, as the average rate for a 30-year fixed-rate mortgage increased slightly to 4.76%, up from 4.75%.
It was the second consecutive week that mortgage application volume fell.
Applications for refinances decreased 6% while applications for purchases fell 2%, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
The results include an adjustment for the Martin Luther King Jr. Day holiday.
Applications fell during the last two weeks of December – which is typical for seasonal cycles – but then rebounded during the first two weeks of January. But now, it appears that application volume is back on the decline.
On an unadjusted basis, total volume decreased 10% compared with the previous week. Applications for purchases fell 6% on an unadjusted basis and were 7% lower compared with the same week one year earlier.
“Mortgage applications for purchase and refinances were lower over the past week, as rates nudged higher,” says Joel Kan, associate vice president of industry surveys and forecasts for the MBA, in a statement. “After two weeks of decreases, the purchase index still remained roughly six percent above its long-run average, which is good news with the spring buying and selling season almost underway.
“Despite ongoing supply and affordability constraints, the healthy job market and underlying demographic fundamentals both point to gradual purchase growth in the coming months,” Kan says.
He adds that refinance activity “had seen a small resurgence in the past few weeks, but there still remains only a small share of borrowers left to gain from rates at the current levels.”
As a result, the refinance share of mortgage activity decreased to 42.0% of total applications, down from 44.5% the previous week.
The adjustable-rate mortgage (ARM) share of activity fell to 7.9% of total applications.
The average rate for a 5/1 ARM was 4.14%, up from 4.12%.