by Calculated Risk on 9/18/2024 07:00:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 14.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending September 13, 2024. Last week’s results included an adjustment for the Labor Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 14.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 26 percent compared with the previous week. The Refinance Index increased 24 percent from the previous week and was 127 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 15 percent compared with the previous week and was 0.4 percent lower than the same week one year ago.

“Application activity was up significantly last week, as market expectations of a rate cut from the Fed pulled mortgage rates lower. The 30-year fixed mortgage rate, at 6.15 percent, is now at its lowest since September 2022 and is more than a full percentage point lower than a year ago,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Refinance applications were up 24 percent – more than double last year’s pace, with both conventional and government activity jumping to the fastest pace of refinancing since 2022.”

Added Kan, “There was also an increase in purchase applications, and it is notable that conventional purchase applications increased to a pace ahead of last year, which also drove overall purchase applications very close to year-ago levels. Homebuyers are seeing improving affordability conditions, sparked by lower rates and slower home-price growth.”
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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.15 percent from 6.29 percent, with points increasing to 0.56 from 0.55 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is down 0.4% year-over-year unadjusted (mostly unchanged year-over-year!).  

Red is a four-week average (blue is weekly).  

Purchase application activity is up about 17% from the lows in late October 2023, but still below the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

With higher mortgage rates, the refinance index declined sharply in 2022 - and mostly flat lined for two years - but has increased recently as mortgage rates declined.