The numbers: Boosted by refinancing activity, mortgage demand crept up by a seasonally adjusted 1.2%.
As mortgage rates dropped across the board, demand for refinancing increased, pushing the market composite index up, the Mortgage Bankers Association (MBA) said on Wednesday.
The index is a measure of mortgage application volume.
The market index rose by 1.2% to 186.7 for the week ending Jan. 6, from a week earlier. A year ago, the index stood at 580.6.
Key details: The refinance index grew 5.1%, but was down 86% compared to a year ago.
But the purchase index — which measures mortgage applications for the purchase of a home — fell by 0.5% from the last week. Purchase applications are at the lowest level since 2014.
Mortgage rates fell across the board.
The average contract rate for the 30-year mortgage for homes sold for $647,200 or less was 6.42% for the week ending Jan. 6. That’s down from 6.58% the week before, the MBA said.
For homes sold for over $647,200, the average rate for the 30-year was 6.09%.
The 15-year fell to 5.94%.
The rate for adjustable-rate mortgages fell to 5.37%.
The big picture: Mortgage rates are falling but it’s still not enough to lure the prospective homebuyer back into the market.
For what it’s worth, sellers are trying really, really hard: Some homebuilders are playing hardball with buydown offers that bring rates to as low as 2.75%.
What are they saying? “Purchase applications continued to be hampered by broader weakness in the housing market and declined slightly over the week,” Joel Kan, vice president and deputy chief economist at the MBA, said.
Market reaction: The yield on the 10-year Treasury note
rose above 3.5% in early morning trading Wednesday.
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