There was good news on the application front last week, according to the latest data from the Mortgage Bankers Association.
The Market Composite Index, the trade group’s measure of mortgage loan application volume, was up by 5.4% on a seasonally adjusted basis from one week earlier and was up 16% on an unadjusted basis. The seasonally adjusted Purchase Index increased 2% week-over-week and the unadjusted index was 12% higher – although the latter was also 26% than the same week one year ago.
The Refinance Index shot up by 13% from the previous week, but it was also 29% lower than the same week one year ago. The refinance share of mortgage activity increased to 31.6% of total applications from 29.1%.
Among the federal programs, both the FHA and USDA shares of total applications remained unchanged from the prior week at 14.2% and 0.4%, respectively, while the VA share of total applications decreased to 11% from 11.3% the week before.
“Mortgage applications increased last week, despite the 30-year fixed mortgage rate edging back up to 7.31% – its highest level in four weeks,” said Joel Kan, MBA’s vice president and deputy chief economist. “Purchase applications increased for conventional and FHA loans over the week but remained 26% lower than the same week a year ago, as homebuyers continue to face higher rates and limited for-sale inventory, which have made purchase conditions more challenging. Refinance applications also increased last week but are still almost 30% lower than the same week last year. The average loan size on a purchase application was $416,800, the highest level in six weeks. Home prices in many markets have been supported by low inventory and resilient housing demand for available homes.”