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There was buoyant activity in the home loan market last week, according to data from the Mortgage Bankers Association (MBA).

The trade group’s Market Composite Index was up by 6.3% on a seasonally adjusted basis from one week earlier, while the unadjusted index was higher by an even 7%. The seasonally adjusted Purchase Index increased by 5% while its unadjusted counterpart was up 5.3% — although the latter was also 32% lower than the same week one year earlier

The Refinance Index increased by a solid 10% from the previous week, although it was also 44% lower than the same week one year ago. The refinance share of mortgage activity increased to 28% of total applications from 27.2% in the previous week.

Among the federal programs, the FHA share of total applications decreased to 12.1% from 12.5% while the VA share of total applications increased to 12.9% from 11.3% and the USDA share of total applications dipped to 0.4% from 0.5%.

“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,” declared Joel Kan, MBA’s vice president and deputy chief economist, who noted that refinance activity rose to the “highest levels since September 2022, although there is only a small pool of borrowers who can benefit from refinancing with rates at these levels.”