Mortgage applications were in decline last week, according to new data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, dropped by 1.6% on a seasonally adjusted basis from one week earlier while the unadjusted index was down by an even 1%.
Both the seasonally adjusted and unadjusted Purchase Index were 1% lower from one week earlier, while the latter was 14% lower than the same week one year ago. The Refinance Index decreased 3% from the previous week and was also 3% lower than the same week one year ago, while the refinance share of mortgage activity dipped slightly to 31.2% of total applications from 31.6% the previous week.
Among the federal programs, the FHA share of total applications increased to 12.1% from 12.0% the week prior while the VA share of total applications decreased to 12.1% from 12.2% and the USDA share of total applications remained unchanged at 0.5%.
Joel Kan, MBA’s vice president and deputy chief economist, observed, “Mortgage applications continued to show sensitivity to rate movements, and both purchase and refinance activity decreased over the week. With housing supply low and price high, the average loan size for purchase applications increased to the highest level since May 2022.”
Separately, the MBA’s Builder Application Survey data for February showed mortgage applications for new home purchases increased 15.7% from a year ago; compared to January 2024, applications inched up by 1%.
The MBA estimated new single-family home sales were at a seasonally adjusted annual rate of 689,000 units in February, down on seasonally adjusted estimate by 1.6% from the January pace of 700,000 units. On an unadjusted basis, the MBA estimated there were 62,000 new home sales in February, down by 1.6% from 63,000 new home sales in January.
The average loan size for new homes increased from $401,282 in January to $405,719 in February. Conventional loans accounted for 63.9% of loan applications, while FHA loans composed 25.7%, VA loans were 10.1% and RHS/USDA loans were 0.3%.
“The FHA share of purchase applications, which provides a read on first-time homebuyer activity, increased to 25.7%, indicating that first-time buyers continue to turn to new homes due to the lack of affordable existing home options,” said Kan. “The estimated sales pace of new home sales was 689,000 units, a slight decline from the previous month.”
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