During the week that mortgage rates very briefly touched down into the 5% range, mortgage applications increased 7.4%, according to the latest reading from the Mortgage Bankers Association. Still, mortgage demand is down 58% from a year prior.
Mortgage rates fell to 5.99% on Thursday, Feb. 2 following comments made by Federal Reserve Chairman Jerome Powell about disinflation. A day later, mortgage rates shot back up to 6.18%, which nevertheless represented the fifth consecutive weekly decline in rates.
“The 30-year fixed rate is almost a percentage point below its recent high of 7.16% in October 2022,” said Joel Kan, MBA’s vice president and deputy chief economist. “Both purchase and refinance applications increased last week and have shown gains in three of the past four weeks because of lower rates…Purchase activity that was put on hold last year due to the quick runup in rates is gradually coming back as rates ease and housing demand remains strong, driven by supportive demographics and the ongoing strength in the job market.”
Because home prices remain high, inventory is low and first-time homebuyers are largely shut out of the market, the average loan size last week checked in at $428,500, the highest level since May 2022.
Overall, the refinance share of activity was 33.9% last week, up from 31.2%. Adjustable-rate mortgages represented 6.6% of total applications.
As of Wednesday, Feb. 8, mortgage rates on a 30-year-fixed rate loan averaged 6.42%.
Some other stats at a glance:
