Mortgage Rates See Little Change From Last Week

Mortgage Applications Decline

According to the Mortgage Bankers Association’s (MBA) most recent Weekly Applications Survey for the week ending February 23, 2024, mortgage applications experienced a 5.6% decrease from the previous week. Mike Fratantoni, MBA’s SVP and Chief Economist, noted that mortgage rates remained relatively stable but slightly higher compared to the beginning of the year, contributing to the slowdown in activity.

Refinance and Purchase Activity

The Refinance Index saw a notable 7% drop from the previous week and was 1% lower than the same week last year. On the other hand, the seasonally adjusted Purchase Index decreased by 5% from the previous week. Fratantoni highlighted a concerning trend, stating that purchase activity was trailing 12% behind last year's pace. However, he also mentioned a glimmer of hope revealed by the January Builder Application Survey, which showed a 19% increase in applications to buy new homes compared to the previous year.

The refinance share of mortgage activity dipped to 31.2% of total applications, down from 32.6% the previous week. Interestingly, there was a slight uptick in the adjustable-rate mortgage (ARM) share of activity, which increased to 7.5% of total applications.

Interest Rate Fluctuations

Interest rates saw mixed movements across different loan products. For 30-year fixed-rate mortgages with conforming loan balances, the average contract interest rate decreased slightly to 7.04%. Conversely, for jumbo loan balances, the average contract interest rate increased to 7.20%. Rates for FHA-backed mortgages decreased to 6.86%. Additionally, the average contract interest rate for 15-year fixed-rate mortgages and 5/1 ARMs experienced both increases and decreases, highlighting the dynamic nature of the market.

Wrapping Up

The latest data from the MBA depicts a mortgage market influenced by stable yet slightly higher interest rates. Refinance activity has slowed, and purchase activity continues to face challenges due to constrained inventory. Prospective homebuyers and current homeowners should stay vigilant and consult with mortgage professionals to navigate these market conditions effectively.

(Source: mba.org)

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