Even for a week containing a holiday, last week was a bad one. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, fell 7.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared to the previous week. The week ended January 21 started with the observance of Martin Luther King’s birthday although MBA did not indicate it adjusted its data to account for it. The Refinance Index decreased 13 percent from the previous week and was 53 percent lower than the same week one year ago. The refinance share of mortgage activity declined to 55.8 percent of total applications from 60.3 percent the previous week, the lowest for refinancing since Christmas week 2019. [refiappschart] The Purchase Index dipped 2 percent from one week earlier although it was 5 percent higher on an unadjusted. Purchase volume was 11 percent lower than the same week one year ago. [purchaseappschart] “All mortgage rates in MBA’s survey continued to climb, with the 30-year fixed rate rising for the fifth consecutive week to its highest level since March 2020. The 30-year fixed rate is now 77 basis points higher than it was a year ago,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Unsurprisingly, borrower demand for refinances subsided, with applications falling for the fourth straight week. After almost two years of lower rates, there are not many borrowers left who have an incentive to refinance. Of those who are still in the market for a refinance, these higher rates are proving much less attractive to them.”   

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