Mortgage applications across the United States increased by over 9% in the first week of January compared with the prior week, according to a report.
The total number of mortgage applications in the week ending Jan. 5 was 9.9% higher than the previous week, per a seasonally adjusted index report released Wednesday by the Mortgage Bankers Association (MBA).
The number stated in the report had additional adjustments to account for the New Year's Holiday. On an unadjusted basis, the MBA said the index increased by 45% compared to the prior week.
In addition, applications to refinance a home loan increased by 19% from the week before. It was also 30% higher than the number of applications recorded in the same week in 2023. Applications for a mortgage to purchase a home rose 6% this week but were 16% lower than the same period last year.
"The increase in purchase and refinance applications for both conventional and government loans is promising to start the year but was likely due to some catch-up in activity after the holiday season and year-end rate declines," Joel Kan, an economist for the MBA, said in the report.
The recent jump is a promising sign for this year's housing market and could be an indication that more buyers are coming back to the market. This comes after the home affordability rates last year fell to the worst recorded since 1984, according to CNN Business.
What Are the Predictions for 2024?
Real estate experts and economists predict mortgage rates to fall in 2024, but not go below 6%. For context, mortgage rates soared past 8% in October 2023 after the Federal Reserve imposed aggressive interest rate policy actions in hopes of taming inflation.
The Feds recently indicated plans to cut its benchmark rates this year. Mortgage rates for 30-year terms slipped for nine consecutive weeks until they increased again by 0.1% in the week ending Jan. 4 to 6.62%, per Freddie Mac's Primary Mortgage Market Survey.
That being said, the mortgage rates for the 15-year term continued to fall. In the week ending Jan. 4, rates slipped by 0.04 percentage points to 5.89%.
