Talk about a new year new me! After a slight uptick to start 2023, total mortgage demand skyrocketed 27.9% in the second week in January, according to the latest weekly survey from the Mortgage Bankers Association.
- Purchase demand jumped 25% from one week earlier but was still 35% lower than the same week one year ago.
- Refi demand jumped 34% from the previous week but was still down 81% compared to last year.
Breaking It Down. After a big week, the refinance share of mortgage activity increased to 31.2 % of total applications. Meanwhile, better rates have pushed the adjustable-rate mortgage share of activity down to 6.6% of total applications.
Rates. Mortgage rates fell for the second week with the 30-year fixed falling to 6.23%, down 19 basis points from last week and now down 35 basis points from the end of 2022. Unfortunately, rates are still 277 basis points higher than last year.
- The 15-year fell 12 basis points to 5.94% and the 5/1 ARM was down 24 basis points to 5.37%.
Analysis. Mike Fratantoni, Chief Economist at MBA, said real estate data is finally moving in the right direction. “Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.”