Refinance Applications Rise on Falling Rates

Applications for refinancing rebounded last week from the previous week’s holiday-related slowdown but purchase applications slid lower. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, increased 1.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 27.0 percent compared with the previous week which was adjusted to account for Independence Day. The Refinance Index was up 7.0 percent from the previous week and was 32.0 percent lower than the same week in 2022. Applications for refinancing accounted for 28.4 percent of total activity compared to 26.8 percent the previous week. [refiappschart] The seasonally adjusted Purchase Index dipped 1.0 percent week-over-week and was 2 percent higher on an unadjusted basis. The Index was 21 percent lower than the same week one year ago. [purchaseappschart] “Mortgage rates declined last week, as markets responded positively to incoming data showing that U.S. inflation continues to cool. Most rates in our survey declined, with the 30-year fixed rate falling to 6.87 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Refinance applications increased more than 7 percent, but that activity accounted for only 28 percent of applications and was more than 30 percent behind last year’s pace. Despite last week’s lower rates, purchase applications decreased, as home purchase activity is still being held back by low housing supply and rates that are still much higher than a year ago.”   
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