Mortgage applications in the U.S. saw a sharp increase during the first week of 2024.
The Market Composite Index, a measure of mortgage loan application volume in the U.S., rose 9.9% on a seasonally adjusted basis from a week earlier, according to the latest Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 5.
“Despite an uptick in mortgage rates to start 2024, applications increased after adjusting for the holiday,” said Joel Kan, vice president and deputy chief economist at MBA in a news release.
Even on an unadjusted basis, the Index saw a 45% increase compared with the previous week, according to the MBA.
“The increase in purchase and refinance applications for both conventional and government loans is promising to start the year but was likely due to some catch-up in activity after the holiday season and year-end rate declines,” Kan said, adding “Mortgage rates and applications have been volatile in recent weeks and overall activity remains low.”
Mortgage rates in the U.S. have dropped from a two-decade high of 8% in October 2023, to a start-of-the-year range of about 6.5%, according to data from Mortgage News Daily.
The number of applications to refinance an existing mortgage also increased during the period.
The holiday-adjusted Refinance Index rose 19% from the previous week and was 30% higher than the same week a year earlier. On an unadjusted basis, the Refinance Index increased 53% from the previous week and was 17% higher than the same week in 2023, according to MBA’s Weekly Mortgage Applications Survey.
Overall, the refinance share of mortgage activity increased to 38.3% of total applications from 36.3% the previous week.
Meanwhile, the Purchase Index, which includes all mortgage applications for the purchase of a single-family home, increased 6% from a week earlier, suggesting homebuyers entered 2024 with enhanced confidence knowing the Federal Reserve is nearing the start of its rate-cut cycle.
