Mortgage Applications Drop Over Mlk Holiday, Inauguration Week

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.0% on a seasonally adjusted basis from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) latest weekly mortgage applications survey. This week’s results for the week ending Jan. 24, 2025, include an adjustment for the Martin Luther King holiday.

On an unadjusted basis, the index decreased 9% compared with the previous week. The refinance index decreased 7% week-over-week but was 5% higher than the same week one year ago.

The seasonally adjusted purchase index decreased 0.4% from the week prior while the unadjusted purchase Index decreased 4% and was 7% lower than the same week one year ago.

“Mortgage rates were mixed last week, and the 30-year fixed rate remained unchanged at 7.02%. Application activity was slightly weaker, primarily because of a 7% decline in refinancing across both conventional and government loans,” said Joel Kan, MBA’s vice president and deputy chief economist. “Purchase activity decreased slightly, but applications for FHA purchase loans were a bright spot, increasing by 2%. New and existing home sales ended 2024 on a strong note, and if mortgage rates continue to stabilize and for-sale inventory loosens, we expect a gradual pick up in purchase activity in the coming months.”

The refinance share of mortgage activity decreased to 37.1% of total applications from 40.4%
the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.8% of total applications.

The FHA share of total applications increased to 16.7% from 16.5% the week prior. The VA
share of total applications decreased to 13.2% from 14.6% the week prior. The USDA share
of total applications increased to 0.5% from 0.4%.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances remained unchanged from last week’s 7.02%. For 30-year fixed-rate mortgages with jumbo loan balances, the interest rate increased to 7.02% from 6.98%

FHA-backed 30-year mortgages’ interest rate decreased to 6.72% from 6.74% while the average contract interest rate for 15-year fixed-rate mortgages decreased to 6.37% from 6.45%.