Mortgage demand jumped 9.9% to start 2024, the biggest jump since January 2023, according to the weekly survey from the Mortgage Bankers Association.
- Purchase demand jumped to an index of 148.6 for the week ending January 5th, up 5.6% from last week and close to a five-month high.
- Refinance demand skyrocketed to an index of 425.4 for the week ending January 5th, up a whopping 18.8% from last week and close to an eight-month high.
NOTE: The jump in demand is the biggest jump since the start of 2023.
Rates. The average contract interest rate for 30-year fixed-rate mortgage increased to 6.81% for the week ending January 5th, up five basis points from last week and the second straight weekly increase.
- The average contract interest rate for a 15-year fixed-rate mortgage jumped 15 basis points to 6.41%.
Analysis. Joel Kan, MBA’s Deputy Chief Economist, notes that the jump has more to do with catch-up activity than any big change in consumer sentiment. “The increase in purchase and refinance applications for both conventional and government loans is promising to start the year but was likely due to some catch-up in activity after the holiday season and year-end rate declines.”
BOTTOM LINE: Rates have been trending down and mortgage demand has been trending up since October. We saw a slight reversal to end 2023, but it looks like we are back on track to start 2024.