Mortgage applications reach six-week high

Improving economic conditions lead to a boost

Mortgage applications reach six-week high

Mortgage applications have risen to their highest level in six weeks, buoyed by improving inflation and mortgage rates.

According to the latest data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey, home loan applications jumped 3% week over week on a seasonally adjusted basis and down 0.1% on an unadjusted basis.

“US bond yields continued to move lower as incoming data signaled a softer economy and more signs of cooling inflation,” said MBA deputy chief economist Joel Kan. “Most mortgage rates in our survey decreased, with the 30-year fixed mortgage rate decreasing to 7.41%, the lowest rate in two months.”

MBA’s refinance index reported a 2% increase, and the seasonally adjusted purchase index was up 4% from the previous week.

“Purchase applications were up almost 4% over the week, on a seasonally adjusted basis, as both conventional and government purchase loans saw increases,” Kan said. “The average loan size on a purchase application was $403,600, the lowest since January 2023. This is consistent with other sources of home sales data showing a gradually increasing first-time homebuyer share.”

The survey also revealed changes in other mortgage application types. The refinance share of mortgage activity increased to 32.4% of total applications from 31.9% the prior week. The adjustable-rate mortgage (ARM) share decreased to 8.3% of total applications.

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“Refinance applications increased 1.6% last week, but the level of refinances continues to be well below historical averages, given that most borrowers already have a rate well below current market rates,” Kan added.

In terms of government loan applications, the FHA share increased to 14.8% from 14.4% the previous week. The VA share edged up one basis point to 11.3%, while the USDA share of total applications dipped one basis point to 0.4%.

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