US mortgage refinancing activity fell for the second week in a row. Mortgage Bankers Association (MBA) data showed that the refinance index decreased by 5.0 percent in week ended Jan. 22 (v -4.7 percent w/w prior). However, US mortgage refinancing activity was still up 65.1 percent compared to the same week one year ago.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said “Mortgage rates were mixed last week, with the 30-year fixed rate rising to its highest level since November 2020 at 2.95 percent*, and all other rates in the survey posting a decline. In a sign that borrowers are increasingly more sensitive to higher rates, large declines in government purchase applications and refinance applications pulled overall activity lower. The refinance index has now declined for two straight weeks, but is still 83 percent higher than last year“.
In the meantime, demand from homebuyers weakened. On a seasonally adjusted basis, purchase applications decreased by 5 percent last week. However, activity remained up 16 percent from a year ago while the average purchase loan amount hit another record high of $395,200. In line with other reports, it confirms that housing prices are still gaining traction despite lower volume of transactions.
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