Mortgage demand rises 2.8%, fueled by 7% leap for refis

Mortgage applications rose 2.8% last week as lower borrowing costs spurred a pickup in refinancing activity, according to the Mortgage Bankers Association (MBA)’s weekly mortgage applications survey for the week ending Feb. 13.

On an unadjusted basis, the index rose 5% compared with the previous week.

Refinance applications led the gain, climbing 7% from the previous week and surging 132% from the same week a year ago. But the seasonally adjusted purchase index fell 3% from one week earlier. On an unadjusted basis, purchase applications increased 3% week over week and were 8% higher than a year ago.

“Mortgage applications rose last week as the lowest rates in four weeks helped to revive some refinance activity. Treasury yields ended the week lower as weaker data on retail sales and home sales outweighed better-than-expected readings on the job market for January,” said Joel Kan, MBA’s vice president and deputy chief economist.

“Mortgage rates moved lower with the 30-year fixed rate decreasing to 6.17%, and all other loan types in the survey also declined. Refinance applications increased across all loan types, marking the strongest week for refinancing since mid-January. However, there was a drop in purchase applications overall, although VA purchase applications bucked the trend and increased 4%.”

The refinance share of total mortgage activity rose to 57.4%, up from 56.4% the prior week. The adjustable-rate mortgage share increased to 8.2% of total applications.

The Federal Housing Administration (FHA) share of total applications was unchanged at 18.4%. The U.S. Department of Veterans Affairs (VA) share increased to 16.5%, up 50 basis basis from a week ago, while the U.S. Department of Agriculture (USDA) share remained flat at 0.4%.

The average contract rate for 30-year fixed-rate mortgages with conforming loan balances of $832,750 or less fell 4 bps to 6.17%. Rates for 30-year fixed mortgages with jumbo balances declined 9 bps to 6.21%.

The average rate for 30-year FHA loans edged down 2 bps to 5.99% and the rate for 15-year fixed mortgages dropped from 5.65% to 5.50%. The average rate for 5/1 adjustable-rate mortgages slipped 4 bps to 5.29%.

Xactus Mortgage Intent Index

Data from Xactus‘s Mortgage Intent Index — which analyzes aggregated, anonymized credit-pull activity across the Xactus Intelligent Verification Platform — found that activity rose 2.19% week over week and was up 4.8% compared to the same week last year.

“This marks the first positive year-over-year gain since January 23, signaling a rebound after two weeks of weather-related disruption. A welcome confirmation that pre-storm strength was not an outlier — and an encouraging sign heading into the spring homebuying season,” said Thomas Lloyd, chief strategy officer for Xactus.