A little bright spot to start 2023 as total mortgage demand jumped 1.2% for the week thanks to a solid jump in refis, according to the weekly survey from the Mortgage Bankers Association.
- The refinance index jumped 5.0% week-over-week but is still down 86% compared to the same time last year.
- The purchase index was down 1.0% week-over-week and is still down 44% compared to last year.
Breaking It Down. The refinance share of mortgage activity increased to 30.7% of total applications and the adjustable-rate mortgage share of activity remained unchanged at 7.3% of total applications.
Rates. The average contract interest rate for 30-year fixed-rate mortgages fell to 6.42%, this is down 16 basis points from one week ago but is up 290 basis points when compared to the same time last year.
- The 15-year fixed fell to 5.94% and the 5/1 ARM reported a big drop to 5.37%.
Analysis. Joel Kan, MBA’s Vice President and Deputy Chief Economist, said despite the uptick we still have a long way to go. “Mortgage rates declined last week as markets reacted to data showing a weakening economy and slowing wage growth. All loan types in the survey saw a decline in rates, with the 30-year fixed rate falling to 6.42 percent. Purchase applications continued to be hampered by broader weakness in the housing market and declined slightly over the week, with the index slipping to its lowest level since 2014,”