Mortgage applications decreased 4.1% from the previous week, based on Mortgage Bankers Association (MBA) data from the week ending January 22.
The Refinance Index decreased 5% from the previous week and was 83% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 4% from a week earlier, and the unadjusted Purchase Index increased 3% compared with the previous week and was 16% higher than the same week one year ago.
"Mortgage rates were mixed last week, with the 30-year fixed rate rising to its highest level since November 2020 at 2.95%, and all other rates in the survey posting a decline. In a sign that borrowers are increasingly more sensitive to higher rates, large declines in government purchase applications and refinance applications pulled overall activity lower. The refinance index has now declined for two straight weeks, but is still 83% higher than last year," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Purchase applications also decreased last week, but the impressive trend of year-over-year growth since the second half of 2020 has continued in early 2021. Activity was up 16% from a year ago, and the average purchase loan amount hit another record high of $395,200. Since hitting a recent low in April 2020, the average purchase loan amount has steadily risen — in line with the accelerating home-price appreciation occurring in most of the country because of strong demand and extremely low inventory levels."
The FHA share of total applications increased to 9.4% from 9.3% the week prior, according to the MBA report. The VA share decreased to 12.4% from 13.8% the week prior; USDA's share increased to 0.5% from 0.4% the week prior.
The MBA's weekly Mortgage Application Volume survey covers more than 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. The base period and value for all indexes is March 16, 1990=100.
The report is further detailed on MBA.com.