Mortgage application volume decreased 1.9% on an adjusted basis during the week ended January 15, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances decreased 5% compared with the previous week while applications for purchases increased 3%.
Year over year, applications for refinances were up 87% while applications for purchases were up 9%.
Mortgage rates increased slightly, with the average rate for a 30-year fixed rate mortgage rising to 2.92%, up from 2.88% the previous week.
“Mortgage rates increased across the board last week, with the 30-year fixed rate rising to 2.92 percent – its highest level since November 2020 – and the 15-year fixed rate increasing for the first time in seven weeks to 2.48 percent,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Market expectations of a larger than anticipated fiscal relief package, which is expected to further boost economic growth and lower unemployment, have driven Treasury yields higher the last two weeks.
“After a post-holiday surge of refinances, higher rates chipped away at demand,” Kan says. “There was a five percent drop in refinance activity, driven by a 13.5 percent pullback in government refinances.
“Purchase applications remained strong based on current housing demand, rising over the week and up a noteworthy 15 percent from last year,” Kan adds. “Homebuyers in early 2021 continue to seek newer, larger homes. The average loan size for purchase loans jumped to $384,000, the second highest level in the survey.”
The refinance share of mortgage activity decreased to 72.3%, of total applications, down from 74.8% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 2.1% of total applications.
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