The volume of mortgage applications increased last week for both home purchases and refinancing. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, increased 6.3 percent on a seasonally adjusted basis and was 7 percent higher on an unadjusted basis compared with the previous week. The Refinance Index increased rose by 10 percent but remains 44 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 28.0 percent of total applications from 27.2 percent the previous week. [refiappschart] The seasonally adjusted Purchase Index was up 5 percent. Before adjustment that index was 5.3 percent higher for the week, lagging its level a year earlier by 32 percent. [purchaseappschart] Joel Kan, MBA’s Vice President and Deputy Chief Economist said, “Mortgage applications responded positively to a drop in rates last week, as the Fed signaled a potential pause at the current level for the federal funds rate in anticipation of inflation slowing and tightening financial conditions that will slow economic and job growth. Mortgage rates for all surveyed loan types decreased over the week with the 30-year fixed rate at 6.48 percent. “Purchase applications increased 5 percent last week but were still more than 30 percent below last year’s level. Lower rates from week to week have helped buyers in the market,” Kan said, “but limited for-sale inventory remains a challenge for many homebuyers. Refinance activity jumped 10 percent to its highest levels since September 2022, although there is only a small pool of borrowers who can benefit from refinancing with rates at these levels.”
