According to the Mortgage Bankers Association (MBA) poll for the week ending Jan. 14, mortgage applications jumped 2.3% from the previous week, majorly due to a robust purchase market. The seasonally adjusted Purchase Index increased 7.9% from the past week, while the Refinance Index fell 3.1% during the same period. Mortgage applications fell 37.3% last week relative to the same week a year earlier, with refinancing applications falling by 49.2% compared to buy applications (-12.2%).
In a statement released by Joel Kan, MBA’s associate vice president of economic and industry forecasts, the 30-year fixed rate has increased by more than 30 basis points in the last two weeks. He added that higher rates resulted in the “slowest pace of refinancing operations in over two years,” mostly among Federal Housing Administration and Veteran Benefit Administration loans.
The average loan amount for purchase applicants hit a new high of $418,500. “High home price increases and a dearth of housing inventory on the market – notably for entry-level properties – are driving the continuous rise in buy loan application sizes,” Kan added.
In addition, government purchase applications grew slower, contributing to higher loan amounts and implying that first-time buyers are having difficulty finding homes in their price range. Last week, the refinance percentage of overall mortgage applications fell to 60.3%, down from 64.1% the week before. In addition, veteran Administration loan applications dropped from 11.4% to 10% during the same period.
To read more about the current state of things with Mortgage applications, particularly Federal Housing Administration and Veteran Administration Loans, click here.
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