Mortgage demand picks up again: MBA

Key Takeaways:

– Mortgage demand surged despite an increase in mortgage rates at the beginning of 2024.
– Mortgage applications increased by 9.9% for the week ending Jan. 5 compared to the previous week.
– The 30-year fixed mortgage rate averaged 6.62% as of Jan. 4.
– The increase in applications was likely due to catch-up in activity after the holiday season and year-end rate declines.
– Purchase applications rose by 6% week over week on an adjusted basis.
– Refinance applications were 19% higher than the previous year.
– The share of FHA loan activity decreased slightly, while the share of VA loan activity increased.
– The share of USDA loan activity also decreased slightly.

HousingWire:

Despite an uptick in mortgage rates at the beginning of 2024, mortgage demand surged after adjusting for the holiday.

Mortgage applications increased 9.9% for the week ending Jan. 5 compared to one week earlier, according to data from the Mortgage Bankers Association (MBA).

The 30-year fixed mortgage rate averaged 6.62% as of Jan. 4, according to Freddie Mac’s Primary Mortgage Market Survey.

“The increase in purchase and refinance applications for both conventional and government loans is promising to start the year but was likely due to some catch-up in activity after the holiday season and year-end rate declines,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. “Mortgage rates and applications have been volatile in recent weeks and overall activity remains low.”

Purchase applications rose by 6% week over week on an adjusted basis. Meanwhile, refinance applications were 19% higher than a year ago.

The share of Federal Housing Administration (FHA) loan activity decreased to 14.4% from 14.5% the week prior. The share of Department of Veterans Affairs (VA) loan activity was 16.3%, up from 14.6% over the previous week, while the share of U.S. Department of Agriculture (USDA) loan activity decreased to 0.4% compared to 0.5% the previous week.

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Property Chomp’s Take:

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In recent news, despite a slight increase in mortgage rates at the beginning of 2024, there has been a surge in mortgage demand after adjusting for the holiday season. According to data from the Mortgage Bankers Association (MBA), mortgage applications increased by 9.9% for the week ending January 5 compared to the previous week.

The average 30-year fixed mortgage rate, as reported by Freddie Mac’s Primary Mortgage Market Survey, stood at 6.62% as of January 4. However, Joel Kan, MBA’s vice president and deputy chief economist, believes that the increase in mortgage applications can be attributed to catch-up activity after the holiday season and year-end rate declines. He also mentioned that mortgage rates and applications have been volatile in recent weeks, and overall activity remains low.

On an adjusted basis, purchase applications rose by 6% week over week, indicating a healthy demand for home buying. Refinance applications were also 19% higher than the same time last year, showing that homeowners are taking advantage of lower rates to refinance their existing mortgages.

The share of Federal Housing Administration (FHA) loan activity decreased slightly, while the share of Department of Veterans Affairs (VA) loan activity increased. Additionally, the share of U.S. Department of Agriculture (USDA) loan activity decreased slightly. These numbers provide insights into the types of loans being sought by borrowers and the assistance they may be receiving from government programs.

In conclusion, the surge in mortgage demand despite the increase in rates at the beginning of the year is a positive sign for the housing market. The catch-up in activity after the holiday season and the availability of lower rates have contributed to the rise in mortgage applications. However, it’s important to note that the mortgage market can be volatile, and overall activity remains relatively low. As the year progresses, it will be interesting to see how mortgage rates and applications continue to evolve.

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