WASHINGTON— Mortgage applications increased 0.4% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Feb. 20.
The Market Composite Index, a measure of mortgage loan application volume, increased 0.4% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2% compared with the previous week. The Refinance Index increased 4% from the previous week and was 150% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 5% from one week earlier. The unadjusted Purchase Index decreased 1% compared with the previous week and was 12% higher than the same week one year ago.
“Mortgage rates followed Treasury yields lower last week, with the 30-year fixed rate declining to 6.09% – its lowest level since September 2022. The decrease in rates was enough to drive a 5% increase in conventional refinance applications and a 26% increase in VA refinances,” said Joel Kan, MBA’s vice president and deputy chief economist. “Purchase applications were down over the week but were 12% higher than a year ago, as the combination of lower rates and improving affordability conditions continue to support stronger demand than last year. The ARM share stayed above 8%, as ARM rates remained more than 80 basis points below conforming fixed rates. This is giving payment-sensitive borrowers or those seeking larger loans an incentive to choose this product offering.”
The refinance share of mortgage activity increased to 58.6% of total applications from 57.4% the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8.2% of total applications.
FHA Share
The FHA share of total applications decreased to 16.1% from 18.4% the week prior. The VA share of total applications increased to 18.7% from 16.5% the week prior. The USDA share of total applications remained unchanged at 0.4% from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($832,750 or less) decreased to 6.09% from 6.17%, with points decreasing to 0.53 from 0.56 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $832,750) decreased to 6.20% from 6.21%, with points increasing to 0.42 from 0.27 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 5.97% from 5.99%, with points remaining unchanged at 0.65 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.48% from 5.50%, with points decreasing to 0.70 from 0.73 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs decreased to 5.23% from 5.29%, with points decreasing to 0.41 from 0.62 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.