According to the Mortgage Bankers Association (MBA), there was an uptick in home purchase activity last week, resulting in a slight increase in the Market Composite Index. On a seasonally adjusted basis, this index, which measures the volume of mortgage loan applications, rose by 0.5 percent. However, when compared to the previous week without adjustment, it experienced a 1.0 percent decline.
Compared to the previous week, the Refinance Index saw a 2 percent decline and was 40 percent lower compared to the corresponding week in the previous year. Additionally, the proportion of mortgage activity dedicated to refinancing decreased from 27.3 percent to 26.9 percent of total applications, as observed in the previous week.
After seasonal adjustment, the Purchase Index experienced a 2 percent growth, but it was 0.1 percent lower than the previous week before any adjustments were made. In comparison to the corresponding week in 2022, the index showed a significant decrease of 32 percent.
Joel Kan, the Vice President and Deputy Chief Economist of the MBA, stated that the 30-year fixed mortgage rate dropped for the third consecutive week to 6.73 percent, while other mortgage rates displayed varied outcomes. Kan also observed an increase in purchase applications, primarily fueled by a 2 percent rise in conventional purchase applications and a 3 percent upswing in FHA purchase activity. He pointed out that first-time homebuyers make up a significant portion of FHA purchase loans, and this increase suggests that buyer interest exists.
However, the limited availability of affordable housing inventory continues to restrict activity. Refinance applications, however, continued their declining trend after a temporary increase in the previous week, with the share of refinance applications falling slightly below 27 percent.