MBA observes a promising start to 2024
Mortgage loan applications have bounced back from the holiday slump, registering a 9.9% rise during the week ending January 5.
The Market Composite Index, which measures home loan application volume, rose 9.9% on a seasonally adjusted basis from the previous week, the Mortgage Bankers Association reported today. When unadjusted, the index saw an even more significant increase of 45%.
The surge comes despite a slight increase in the contract interest rate for 30-year fixed-rate mortgages, which climbed five basis points to 6.81%.
“Despite an uptick in mortgage rates to start 2024, applications increased after adjusting for the holiday,” MBA deputy chief economist Joel Kan said.
The refinance index also saw a boost, jumping 19% from the previous week after adjustments and 53% unadjusted. The seasonally adjusted purchase index was up 6% and 40% without seasonal adjustments.
This brings the refinance share of overall mortgage activity up to 38.3%, while the adjustable-rate mortgages (ARMs) share dropped to 5.4% of total applications. The FHA share slightly decreased to 14.4%, while the VA share rose to 16.3%. The USDA share of total applications saw a minor decline to 0.4%.
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“The increase in purchase and refinance applications for both conventional and government loans is promising to start the year but was likely due to some catch-up in activity after the holiday season and year-end rate declines,” Kan added. “Mortgage rates and applications have been volatile in recent weeks, and overall activity remains low.”
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