The numbers: A dip in mortgage rates prompted mortgage demand to rise a seasonally adjusted 27.9%
As mortgage rates dropped across the board, demand for both purchases and refinancing increased. That pushed the market composite index up, a measure of mortgage application volume, the Mortgage Bankers Association (MBA) said on Wednesday.
The market index rose to 238.7 for the week ending Jan. 13, up 27.9% from a week earlier. A year ago, the index stood at 593.7.
Key details: The refinance index jumped 34.2% in the past week, but was down 81% compared to a year ago.
The purchase index—which measures mortgage applications for the purchase of a home—rose by 24.7% from last week.
Mortgage rates fell across the board.
The average contract rate for the 30-year mortgage for homes sold for $726,200 or less was 6.23% for the week ending January 13. That’s down from 6.42% the week before, the MBA said.
For homes sold for over $726,200, the average rate for the 30-year was 6.08%.
The 15-year fell to 5.58%.
The rate for adjustable-rate mortgages fell to 5.31%.
The big picture: All those buyers and homeowners waiting on the sidelines found their moment this past week, as a dip in rates provided an opportunity.
With rates expected to come down further, this trend of mortgage demand running hot may continue in the meantime.
What are they saying? “Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall,” Mike Fratantoni, senior vice president and chief economist at the MBA, said.
“As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers,” he added.