Mortgage applications increased during the week ending Jan. 4 as rates fell across the board, according to the Weekly Mortgage Applications Survey released by the Mortgage Bankers Association (MBA).
The Market Composite Index, a measure of mortgage loan application volume, increased 23.5% on a seasonally adjusted basis and increased 68% on an unadjusted basis. The results include an adjustment for the New Year's Day holiday.
The Refinance Index increased 35%. The Purchase Index increased 17% on a seasonally adjusted basis and rose 59% on an unadjusted basis. The unadjusted Purchase Index was 4% higher than the same week one year ago.
"Mortgage rates fell across the board last week and applications rebounded sharply, after what was a slower than usual holiday period. The 30-year fixed-rate mortgage declined 10 basis points to 4.74%, the lowest since April 2018, and other loan types saw rate decreases of between 9 and 20 basis points," said Joel Kan, MBA's associate vice president of economic and industry forecasting. "This drop in rates spurred a flurry of refinance activity - particularly for borrowers with larger loans - and pushed the average loan size on refinance applications to the highest in the survey (at $339,800). The surge in refinance activity also brought the refinance index to its highest level since last July."
Applications for refinances accounted for 45.8% of overall activity, increasing to its highest level since February from 42.7%. The adjustable-rate mortgage share of activity increased to 8.4% of total applications.
FHA applications made up 10.3% of total applications, up from 10%. The VA share of total applications increased to its highest level since March 2017, 11.6%, from 11%. Applications for USDA mortgages had a 0.6% share, unchanged from the previous period.