Mortgage Apps: Resilient Purchase Volumes

Bottom Line:    Mortgage rates continued to rise last week, pushing above 3.75%, but applications for purchases remained resilient, jumping nearly 8%. Difficult seasonal adjustments around the Christmas and New Years' holidays have passed, and the trend in purchase activity remains modestly higher. Of course, given the move in rates, refi volumes had already been in a significant downtrend and continued lower. Finally, spreads pushed wider in the secondary market again last week. Overall, while mortgages rates back moving back to pre-pandemic levels should slow housing activity, it has remained remarkably robust so far. That said, it is too early to make a firm conclusion that home purchase activity will hold up with average 30-year mortgage rates above 3 3/4%. Historically we've seen sidelined buyers jump into the market after a sharp increase in mortgage, buoying activity for a month or two before volumes slow.The MBA Mortgage Application Index ROSE 2.3% to 594.0, BELOW the 13-week average of 613.0 and -37.3% BELOW the year-ago level. Non-seasonally adjusted the index ROSE slightly, UP 3.0%.The Purchase Index ROSE sharply, UP 7.9% to 306.0, ABOVE the 13-week average of 290.0 but -12.2% BELOW the year-ago level.
 
The Refinancing Index FELL -3.1% to 2276.0, BELOW the 13-week average of 2508.0 and -49.2% BELOW the year-ago level.
 
The effective (adjusted for points paid) 30-year mortgage rate ROSE sharply, UP 12bps to 3.77%, ABOVE the 13-week average of 3.43% and 24bps ABOVE the year-ago level.