Mortgage application volume surged 33.3% during the week ended January 10, despite an increase in rates, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
The increase was due primarily to a rebound in applications for refinances, which increased 44% compared with the previous week and were up 22% compared with the same week one year ago.
Applications for purchases increased 27% compared with the previous week, but were down 2% compared with the same week one year ago.
It should be noted that application volume dropped significantly during the last two weeks of 2024, so the large increase last week should be viewed in context.
“Bond yields in the U.S. and abroad continued to move higher in response to concerns over a sticky inflation outlook and still too-high budget deficits, which pushed mortgage rates higher for the fifth consecutive week,” explains Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “The 30-year fixed rate is now at 7.09 percent – its highest level since May 2024.”
“This time of the year is a particularly volatile time for application volumes, so it can be more helpful to focus on the level rather than the percent change,” Kan says. “Purchase applications were 2 percent lower, and refinances were 22 percent higher compared to a year ago. Total applications were up by 33.3 percent, the highest level in a month, as both purchase and refinance applications saw large percentage increases over the week.”
The refinance share of mortgage activity increased to 42.7% of total applications, up from 40.8% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 5.0% of total applications.
Photo: Susan Q Yin