Mortgage Application Surge Marks Positive Start to 2024 (January 2024)

The real estate market is witnessing a refreshing uptick as we dive into 2024, with a marked increase in mortgage applications reported by the Mortgage Bankers Association (MBA). In a recent analysis for the week ending on January 5, the MBA's Weekly Mortgage Applications Survey observed a significant 9.9 percent rise from the week prior, even after adjustments for the New Year's holiday.

 

This surge represents an overall boost in the Market Composite Index by 9.9 percent on a seasonally adjusted basis and an even more substantial 45 percent jump on an unadjusted basis from the previous week. The findings are heartening for both refinancers and home purchasers; the Refinance Index climbed by 19 percent from the week before and showed a year-over-year increase of 30 percent. Meanwhile, the seasonally adjusted Purchase Index rose by 6 percent from the previous week.

 

Joel Kan, MBA’s Vice President and Deputy Chief Economist, suggests that this rise could be attributed to a post-holiday rebound and year-end rate declines rather than indicating a trend, as recent fluctuations have been volatile.

 

Among the different application types, refinancing made up 38.3 percent of the total activity, showcasing a rise from the preceding week. However, the share for adjustable-rate mortgages (ARMs) saw a decrease to 5.4 percent of the total applications. Government loans also noted changes, with the VA share increasing and the FHA and USDA shares witnessing a slight decline.

 

Interest rates, a crucial factor for homebuyers and refinancers, saw an upward shift across the board. The rate for 30-year fixed-rate mortgages with conforming loan balances rose to 6.81 percent. Likewise, jumbo loans, 30-year fixed-rate mortgages backed by the FHA, 15-year fixed-rate mortgages, and 5/1 ARMs all experienced an increment in their average contract interest rates.

 

This increase in mortgage applications reflects a potentially active year for the housing market amidst a volatile interest rate environment. Real estate professionals and prospective buyers should monitor these trends closely as the year progresses, adapting their strategies accordingly to navigate this dynamic market landscape.

 

For those interested in more detailed insights and continuous updates, the MBA offers subscriptions to their Weekly Applications Survey, which has been a reliable source for industry trends since 1990, covering a majority of all U.S. retail residential mortgage applications.

 

For more information on the survey results and subscription details, visit the MBA's website. As always, staying informed will be key for anyone involved in the real estate sector as we forge ahead into 2024.

 

Michele Schuler

 

January 2024