HousingWireHousingWire
With an adjustment for the New Year’s holiday, mortgage applications increased 33.3% from one week earlier, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey, released today.
This week’s reading, for the week ending Jan. 10, 2025, is a stark difference from last week’s applications, which reflected a seasonal lull following Christmas.
While the market composite index increased over 33% on a seasonally adjusted basis, the index increased 52% on an unadjusted basis during the same time period.
The refinance index, which increased 44% from the previous week, was 22% higher than the same week year over year. The seasonally adjusted purchase index increased by 27% from the previous week, while the unadjusted purchase index increased by 48%. Year over year, the unadjusted purchase index was 2% lower.
“Bond yields in the U.S. and abroad continued to move higher in response to concerns over a sticky inflation outlook and still too-high budget deficits, which pushed mortgage rates higher for the fifth consecutive week. The 30-year fixed rate is now at 7.09% – its highest level since May 2024,” said Joel Kan, MBA vice president and deputy chief economist.
Kan noted in his commentary that this time of the year is “a particularly volatile time for application volumes,” and advised focusing on the level rather than the percent change figures.
“Purchase applications were 2% lower, and refinances were 22% higher compared to a year ago. Total applications were up by 33.3%, the highest level in a month, as both purchase and refinance applications saw large percentage increases over the week.”
The share of refinance mortgage activity increased to 42.7% of total applications from last week’s 40.8%, and the adjustable-rate mortgage (ARM) share of activity increased to 5.0% of total applications.
The Federal Housing Administration (FHA) share of total applications was unchanged, staying steady at 16.9%. Meanwhile, the share of total applications from the U.S. Department of Veterans Affairs (VA) and U.S. Department of Agriculture (USDA) loans decreased. The VA share shrunk to 15.7% from 16.2% the week prior and the USDA share decreased to 0.5% from last week’s 0.6%.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances and 30-year fixed-rate mortgages backed by the FHA both saw increases — for jumbo loans it was an increase to 7.05% from 6.99%, and for FHA loans the interest rate reached 6.76% from 6.65%. The average contract interest rate for 5/1 ARMs also saw an increase, inching up to 6.18% from 5.98%
On the flip side, the average contract interest rate for 15-year fixed-rate mortgages decreased to 6.43% from 6.46%.
