Mortgage application activity was basically flat last week, nearly remarkably so. After much recent volatility, the index is discovering a quick moment of stability, and customers appear content continue to weigh affordability challenges and wait for clearer motion in rates. The Home Mortgage Bankers Association (MBA) reported that applications decreased 0.3% (seasonally adjusted) for the week ending February 6, while increasing 2% on an unadjusted basis.
Purchase demand softened modestly. The seasonally changed Purchase Index slipped 2% from the prior week, while unadjusted purchase applications increased 4% and were 4% higher than the very same week one year back.
Refinance activity posted a little gain. The Refinance Index rose 1%from the previous week and remained 101% greater than a year previously.
Joel Kan, MBA’s Vice President and Deputy Chief Economist, described the week as a variety across loan types. While the 30-year set rate held steady at 6.21%, standard applications decreased for both purchases and refinances as some borrowers wait on a more significant drop in rates or migrate towards other loan types and products.
And they seem doing just that, as FHA and ARM items saw a boost in apps last week. Kan kept in mind that FHA purchase and refinance applications increased, supported in part by FHA rates that remained approximately 20 basis points below the conforming 30-year set rate. He included that borrowers are significantly turning to FHA loans as affordability pressures persist. At the same time, the ARM share climbed to a seven-week high, with ARM rates running almost a complete percentage point below equivalent set rates.
The composition of application activity shifted a little. The re-finance share of total applications reduced to 56.4%, while ARM share increased to 8.0%. FHA share rose to 18.4%, VA share increased to 16.0%, and USDA share held consistent at 0.4%.
Home Mortgage Rate Summary:
- 30yr Repaired: 6.21% (unchanged)|Points: 0.56 (unchanged)
- 15yr Repaired: 5.65% (from 5.61%)|Points: 0.68 (from 0.63)
- Jumbo 30yr: 6.30% (from 6.32%)|Points: 0.34 (unchanged)
- FHA: 6.01% (from 6.04%)|Points: 0.68 (from 0.67)
- 5/1 ARM: 5.33% (from 5.37%)|Points: 0.67 (from 0.58)