Despite still-high rates and a still-low housing inventory, mortgage application activity was on the rise last week, according to new data from the Mortgage Bankers Association (MBA).
The Market Composite Index, a measure of mortgage loan application volume, increased 3% on a seasonally adjusted basis from one week earlier, although on an unadjusted basis the index was 8% lower. Likewise, the seasonally adjusted Purchase Index increased 3% but the unadjusted index was down by 8% – the latter was also 21% lower than the same week one year ago.
The Refinance Index was also up by 3% from the previous week, but was 32% lower than the same week one year ago. The refinance share of mortgage activity increased to 27.2% of total applications from 26.9% the previous week.
Among the federal programs, the FHA share of total applications decreased to 12.9% from 13.3% the week prior while the VA share of total applications increased to 12.2% from 11.9% and the USDA share of total applications remained unchanged at 0.4%.
MBA’s Vice President and Deputy Chief Economist Joel Kan observed, “Mortgage rate changes varied across loan types last week, with the 30-year fixed rate increasing slightly to 6.75%. The spread between the jumbo and conforming rates widened to 16 basis points, the third week in a row that the jumbo rate was higher than the conforming rate. To put this into perspective, from May 2022 to May 2023, the jumbo rate averaged around 30 basis points less than the conforming rate.”
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