Average Mortgage Rates Climb To 7.01%

Analyzing the Latest Mortgage Applications Data

The Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending April 5, 2024 shows that mortgage application volume, as measured by the Market Composite Index, rose by 0.1% on a seasonally adjusted basis. However, there were notable differences between refinancing and purchase applications.

The Refinance Index saw a significant uptick, increasing by 10% from the previous week and marking a 4% increase compared to the same period last year. In contrast, purchase applications experienced a decline. The seasonally adjusted Purchase Index decreased by 5% from the previous week, reaching its lowest level since the end of February. On an unadjusted basis, the Purchase Index was 23% lower than the same week last year, indicating a significant downturn in purchase activity.

Factors Driving Mortgage Rate Movement

Last week, mortgage rates increased, reaching 7.01% on average for 30-year fixed-rate mortgages, the highest level in over a month. Joel Kan, MBA's Vice President and Deputy Chief Economist, highlighted the factors influencing mortgage rate movement: “Mortgage rates moved higher last week as several Federal Reserve officials reiterated a patient posture on rate cuts. Inflation remains stubbornly above the Fed’s target, and the broader economy continues to show resiliency. Unexpectedly strong employment data released last week further added to the upward pressure on rates.”

Shifts in Mortgage Market Share

The refinance share of mortgage activity increased to 33.3% of total applications, reflecting the growing popularity of refinancing amidst rising rates. Conversely, the adjustable-rate mortgage (ARM) share of activity decreased slightly to 6.9% of total applications.

Looking Ahead

The latest data from the MBA's Weekly Mortgage Applications Survey revealed an uptick in refinancing activity, but a fall in purchase applications. As mortgage rates continue to fluctuate, we’re likely to see some volatility in market indicators such as purchase demand. While there are still many signs pointing to a continued heating up of the housing market, the most recent inflation and mortgage rate data could potentially be signaling a slowdown.

(Source: mba.org)

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