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Mortgage Applications Make Big Move

According to the Mortgage Bankers Association [1] (MBA), mortgage application volume decreased 9% from the prior week ending Jan. 27, 2023. 

Citing the Market Composite Index [2], which is a measure of mortgage loan application volume, also found on an unadjusted basis from the previous week, the index fell by 6%. The Refinance Index decreased 7% from the previous week and was 80% lower than the same week one year ago. 

The seasonally adjusted Purchase Index decreased 10% from one week earlier. The unadjusted Purchase Index increased 7% compared with the previous week and was 41% lower than the same week one year ago. 

“Mortgage rates declined for the fourth straight week and have now fallen almost 40 basis points over the past month. Treasury yields were higher on average last week, while mortgage rates decreased, which was a sign of a narrowing spread between the two,” said Joel Kan [3], MBA’s VP and Deputy Chief Economist. “The spread between mortgage rates and the 10-year Treasury has been abnormally wide since early 2022. Further narrowing of that spread is expected to put downward pressure on mortgage rates in the coming months. Overall application activity declined last week despite lower rates, which is an indication of the still volatile time of the year for housing activity. Purchase activity is expected to pick up as the spring homebuying season gets underway, bolstered by lower rates and moderating home-price growth. Both trends will help some buyers regain purchasing power.” 

Other key pieces of data as highlighted by the MBA include: