Mortgage applications decreased 9 percent from one week earlier, according to data from the Mortgage Bankers Association for the week ending January 27, 2023.
According to the MBA, the Refinance Index decreased 7 percent from the previous week and was 80 percent lower than the same week one year ago.
“Mortgage rates declined for the fourth straight week and have now fallen almost 40 basis points over the past month. Treasury yields were higher on average last week, while mortgage rates decreased, which was a sign of a narrowing spread between the two,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The spread between mortgage rates and the 10-year Treasury has been abnormally wide since early 2022. Further narrowing of that spread is expected to put downward pressure on mortgage rates in the coming months. Overall application activity declined last week despite lower rates, which is an indication of the still volatile time of the year for housing activity. Purchase activity is expected to pick up as the spring homebuying season gets underway, bolstered by lower rates and moderating home-price growth. Both trends will help some buyers regain purchasing power.”
The refinance share of mortgage activity decreased to 31.2 percent of total applications from 31.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.7 percent of total applications.