Home loans drive mortgage applications up

Mortgage applications climbed 1.4% for the week ending Jan. 7, 2022, according to a survey released by the Mortgage Bankers Association this week. Growth was supported by a 2% increase in the trade group’s seasonally adjusted buying index, the MBA said.

According to the report, the unadjusted buying index rose 51% from the previous week, but was 17% lower than the same week a year ago.

On the refinancing front, the trade group’s refi index fell 0.1% from the previous week, or 50% less than the same week a year ago.

Joel Kan, associate vice president of economic and industrial forecasting at the MBA, said in a statement that rising mortgage rates are reducing refinancing activity.

“Mortgage rates increased dramatically for all types of loans over the past week as the Federal ReserveThe signal of an upcoming policy tightening has pushed US Treasury yields higher, ”Kan said. “Rates at these levels quickly close the door to refinancing opportunities for many borrowers.”

As proof, the report revealed that the refi share of mortgage activity fell to 64.1% of total applications, against 65.4% the previous week.

The trade group noted that refi requests are at their lowest for more than a month, while conventional refi requests were at their lowest since January 2020.

The activity share of adjustable rate mortgages (ARMs) fell to 3.1% of total loan applications.

During this time, the share of the total requests that constituted FHA and Virginia loans increased to 9.9% and 11.4%, respectively. the USDA The share of total applications remained unchanged from 0.4% the week before, the MBA said.

The trade group noted that it “expects solid growth in buying activity this year as demographic drivers and a strong economy support housing demand. However, the strength of growth will depend on faster growth in housing inventories to meet demand, ”Kan said.

Here’s a more detailed breakdown of this week’s mortgage application data:

The average contractual interest rate for 30-year fixed rate mortgages with compliant loan balances
($ 647,200 or less) fell from 3.33% to 3.52%.

The average contractual interest rate for 30-year fixed rate mortgages with jumbo loan balances (greater than $ 647,200) fell from 3.31% to 3.42%.

The average contractual interest rate for 30-year fixed-rate mortgages guaranteed by the FHA has increased from 3.40% to 3.50%.

The average contractual interest rate for 15-year fixed-rate mortgages fell from 2.60% to 2.73%.

The average contractual interest rate for ARM 5/1 increased from 2.45% to 3.03%.

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