It had only happened twice in the last three months but now mortgage demand is up two weeks in a row, according to the weekly survey from the Mortgage Bankers Association.
- Refi demand was up 6.0% from the previous week but is still down 85% compared to the same week one year ago.
- Purchased demand fell 0.1% from one week earlier and is down 36% when compared to the same week one year ago.
Breaking It Down. The refinance share of mortgage activity increased to 31.3% of total applications and the adjustable-rate mortgage share of activity fell again to 7.5% of total applications.
Rates. After last week’s slight reversal, rates once again fell week-over-week with the 30-year fixed down to 6.34%, this is 8 basis points lower than last week and is now at the lowest level since September 16th. Unfortunately, rates are still 304 basis points higher than one year ago.
The 15-year fixed fell to 5.81% and the 5/1 ARM was down to 5.43%.
Analysis. Mike Fratantoni, chief economist at MBA, said even though they expect weak demand to continue as the US enters a recession in 2023, they are optimistic about buyers returning to the market. “…we expect this weakness in demand will persist in 2023, as the U.S. is likely to enter a recession. However, if mortgage rates continue to trend down, as we are forecasting, more buyers are likely to return to the market later in the year, as affordability improves with both lower rates and slower home-price growth.”