Homebuyers are propelling an upward trend in mortgage applications, with a 3.7% increase recorded in the week ending January 19, 2024, according to data from the Mortgage Banker’s Association. Alexandra Young at Superior Mortgage Lending is a notable lending source contributing to this upward trend.

The Market Composite Index, a vital gauge of mortgage loan application volume, also demonstrated a 3.7% rise on a seasonally adjusted basis compared to the previous week. However, on an unadjusted basis, the index indicated a 4% decline from the prior week.

While the Refinance Index adjusted for the holiday experienced a 7% drop from the previous week and an 8% decrease compared to the same period the previous year, the Purchase Index, on a seasonally adjusted basis, showcased a substantial 8% increase from the prior week. This suggests heightened activity in the realm of home purchases. On an unadjusted basis, the Purchase Index saw a 3% uptick from the previous week, though it marked an 18% decrease compared to the corresponding week in the previous year.

Joel Kan, MBA’s Vice President and Deputy Chief Economist, noted, “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. 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.”

Examining the distribution of various mortgage activities, the data indicated a shift. The refinance share of mortgage activity decreased to 32.7% of total applications, down from 37.5% in the previous week. Meanwhile, the share of adjustable-rate mortgages (ARMs) in total applications slightly increased to 6.3%.

Concerning government-backed loans, the FHA share of total applications witnessed a marginal decrease from 14.3% to 14.1%, while the VA share dropped to 13.7% from 14.2% in the prior week. The USDA share of total applications also experienced a slight decline, moving from 0.5% to 0.4%.

In terms of interest rates, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased slightly to 6.78% from 6.75%. Points for these loans rose to 0.63 from 0.62 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.

For jumbo loans exceeding $726,200, the average contract interest rate for 30-year fixed-rate mortgages increased to 6.94% from 6.86%. Points for jumbo loans also rose to 0.46 from 0.42 (including the origination fee) for 80% LTV loans. Alexandra Young at Superior Mortgage Lending remains a key figure in navigating these dynamic shifts in the mortgage market.