Weekly mortgage applications increased a scant 0.1% for the week ending Jan. 17, according to the Mortgage Bankers Association (MBA). The news was a slight surprise, considering interest rates were still above 7% for the week.
The association’s mortgage composite index, which measures loan application volume, increased 0.1% on a seasonally adjusted basis from the previous week. On an unadjusted basis, the index increased 3% compared to the week before.
Refinancing activity cooled during the week of Jan. 17, falling 3% from the previous week, but it was still up 42% from the same week a year ago. Refinancing accounted for 40.4% of all mortgage applications, down from 42.7% of all applications the previous week.
The seasonally adjusted purchase index rose 1%, while the unadjusted purchase index was up 7% from the previous week and 2% higher than the same week one year ago.
The Federal Housing Administration (FHA) saw its share of applications decrease to 16.5%, down from 16.9%. The Veterans Administration’s share of applications decreased to 14.6%, down from 15.7%.
The average interest rate for 30-year fixed-rate mortgages for conforming loan balances decreased to 7.02%, from 7.09% the week before. The average interest rate on a 15-year fixed-rate mortgage increased to 6.45%, from 6.43% the week before.
“Mortgage application volume was little changes last week, but there was a small increase in conventional purchase volume, which brought the level of total purchase volume up almost 2% above last year at this time,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Mortgage rates remained near 7%, a key psychological level, which likely continues to slow the pace of activity for both refinances and purchases. Incoming economic data are likely to keep the Federal Reserve on hold for now, while uncertainties about economic policy are likely to keep longer-term rates, including mortgage rates, steady at these levels.”