Mortgage Rates And Purchase Loan Applications Inch Up

The 30-year fixed rate mortgage averaged 6.69% as of Jan. 25, up from last week when it averaged 6.60%, according to Freddie Mac’s (OTCQB: FMCC) latest Primary Mortgage Market Survey. A year ago at this time, it averaged 6.13%.

The 15-year fixed-rate mortgage averaged 5.96%, up from last week when it averaged 5.76%. A year ago at this time, it averaged 5.17%.

Sam Khater, Freddie Mac’s chief economist, observed, “Given this stabilization in rates, potential homebuyers with affordability concerns have jumped off the fence back into the market. Despite persistent inventory challenges, we anticipate a busier spring homebuying season than 2023, with home prices continuing to increase at a steady pace.”

Khater’s observation was affirmed with the latest data from the Mortgage Bankers Association’s (MBA) Market Composite Index, which increased 3.7% last week on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4% compared with the previous week. This uptick was fueled by the purchase market – the seasonally adjusted Purchase Index increased 8% while the MLK holiday adjusted Refinance Index decreased 7% over the same period.

“Mortgage rates increased slightly last week, but there continues to be an upward trend in purchase activity. Conventional and FHA purchase applications drove most of the increase last week as some buyers moved to act early this season,” said Joel Kan, MBA’s vice president and deputy chief economist. “Refinance applications declined over the week and remained at low levels. There is still little incentive for homeowners to refinance with rates at these levels.”