Mortgage applications increased 12% from one week earlier, according to data from the Mortgage Bankers Association‘s (MBA) Weekly Mortgage Applications Survey for the week ending January 28.
The Market Composite Index, a measure of mortgage loan application volume, increased 12% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index increased 15% compared with the previous week.
The Refinance Index increased 18% from the previous week and was 50% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 4% from one week earlier. The unadjusted Purchase Index increased 12% compared with the previous week and was 7% lower than the same week one year ago.
“Most mortgage rates in MBA’s survey continued to rise, with the 30-year fixed rate reaching its highest level since March 2020 at 3.78 percent. Despite the increase in rates, refinance applications were up 18 percent, driven mainly by a 22 percent jump in conventional applications. There has likely been some recent volatility in application counts due to holiday-impacted weeks, as well as from borrowers trying to secure a refinance before rates go even higher,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting.
“Purchase applications also increased in the final full week of January but remained 7 percent lower than a year ago,” adds Kan. “The average purchase loan size hit a new survey high once again at $441,100. Stubbornly low inventory levels and swift home-price growth continue to push average loan sizes higher.”
The refinance share of mortgage activity increased to 57.3% of total applications from 55.8% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 4.5% of total applications.
The FHA share of total applications decreased to 7.7% from 8.6% the week prior. The VA share of total applications decreased to 9.1% from 9.9% the week prior. The USDA share of total applications decreased to 0.4% from 0.5% the week prior. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 3.78% from 3.72%, with points decreasing to 0.41 from 0.43 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.