After a seasonably slower rate of activity, the Mortgage Bankers Association reports increased applications came through for the week ending January 4.
According to the Weekly Mortgage Applications Survey, the Market Composite Index increased 11.7 percent on a seasonally adjusted basis, as more consumers may be more willing to purchase and move after the holidays. On an unadjusted basis, the Index went up 49 percent from the week before.
Additionally, the seasonally adjusted Purchase Index moved forward 10 percent from the previous week, and was up 49 percent when not adjusted. MBA notes that the PI is down 2 percent from the week just before the holidays, as many buyers likely pushed to close before the new year for tax benefits, but avoided doing so the week of the Christmas holiday.
Current homeowners have also been taking advantage of affordability extended into 2013, as 82 percent of all applications were for refinances, matching levels seen in recent weeks. The Refinance Index was also higher, increasing 12 percent from the week prior, and is up 1 percent from two weeks ago.
Mortgage rates stay low, affordability high
Data from Freddie Mac's Primary Mortgage Market Survey shows average rates for fixed-rate mortgage options, including 30- and 15-year FRMs, continued to linger near record lows for the first week of January, allowing more prospective buyers to make the investment for less. The average rate for 30-year FRMs fell to 3.34 percent, while the 15-year average rate was 2.64 percent.
Many economists say rates will remain below 4 percent throughout the new year, which should boost housing market activity, contributing to the economic stabilization. While fixed-rate options continue to be affordable options for those buying or refinancing, MBA notes adjustable-rate mortgages have been less popular with applicants, as applications for ARMs accounted for just 3 percent of all activity.
Mortgage records from Freddie Mac have shown rising average rates for 5-year ARMs, which averaged 2.71 percent, up from the week before's average of 2.7. This is near the average 5-year ARM rate seen the same time a year ago of 2.86 percent.