U.S. mortgage demand is up as interest rates decline slightly

Jan. 18 (UPI) -- U.S. mortgage demand is up by 27.9% for the week ending Jan. 13 as interest rates dropped to the lowest level since September, according to the Mortgage Banker's Association.

The MBA's Market Composite Index Weekly Mortgage Applications Survey reflected the increased demand through a rise in mortgage applications.

"Mortgage application activity rebounded strongly in the first full week of January, with both refinance and purchase activity increasing by double-digit percentages compared to last week, which included the New Year's holiday observance," said the MBA's Mike Fratantoni in a statement. "Despite these gains, refinance activity remains more than 80% below last year's pace and purchase volume remains 35% below year-ago levels."

Average interest rates for 30-year fixed-rate mortgages dropped to 6.23% from 6.42%, according to the MBA. Average 15-year fixed-rate mortgages were at 5.31%, down from 5.37% for the week ending Jan. 13.

Fratantoni said homebuyers and sellers will likely face a more affordable housing market in the spring.

"Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers," Fratantoni said.

Mortgage refinancing was up to 31.2% of total applications compared to 30.7% for the previous week.