After rising a cumulative 17 percentage points over the prior two weeks, mortgage application volume slowed slightly last week. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, decreased 1.6 percent on a seasonally adjusted basis from one week earlier and was 1.0 percent lower on an unadjusted basis.  

Both home purchasing and refinancing activity pulled back. The Refinance Index decreased 3 percent from the previous week and was 3.0 percent lower than the same week in 2023. The Purchase Index slid 1.0 percent both before and after adjustment and was 14 percent lower year-over-year.

“Mortgage rates increased last week as incoming data showed inflation was still hotter than expected, which stoked concerns about the timing and extent to which the Fed might be able to reduce the fed funds rates this year. After three weeks of declines, the 30-year fixed mortgage rate increased to 6.97 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Mortgage applications continued to show sensitivity to rate movements, and both purchase and refinance activity decreased over the week. With housing supply low and prices high, the average loan size for purchase applications increased to the highest level since May 2022.”

Other Data from MBA’s Weekly Mortgage Application Survey.

• The refinance share of mortgage activity decreased to 31.2 percent of total applications from 31.6 percent the previous week.
• Even though the size of purchase loans rose $1,200 to the new recent high of $445,000, the average for all loans dipped by about $1,000 to $389,800.
• FHA and VA loan applications each accounted for 12.1 percent of the total and the USDA share was 0.5 percent. All three were essentially unchanged from the prior week.
• The 6.97 percent interest rate for conforming 30-year mortgages (FRMs) represented an increase of 13 basis points from the previous week. Points decreased to 0.64 from 0.65.
• The average rate for jumbo 30-year FRM rose to 7.14 percent from 7.04 percent, with points increasing to 0.54 from 0.38.
• Thirty-year FRM with FHA backing had an average rate of 6.89 percent with 1.04 points. The prior week the rate was 6.77 percent with 0.95 point.
• The rate for 15-year FRM; rose 12 basis points to 6.49 percent while points decreased 0.70 from 0.77.
• The average rate for 5/1 adjustable-rate mortgages (ARMs) was 6.33 percent, declining from 6.38 percent a week earlier. Points averaged 0.55, up from 0.52.
• The ARM share of activity decreased to 7.2 percent of total applications from 7.7 percent in each of the prior two weeks.