Mortgage Refinance Rates Jump 15% with Mortgage Interest Rates at Four Month Low

The pickup in mortgage applications in the US continued last week, rising jumped 7% in the week ended January 20th, 2023, following a 27.9% surge the previous week, data from the Mortgage Bankers Association showed. The move followed the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) down another 3bps to 6.2%, a fresh four-month low. The sharpest gains were in applications to refinance a home loan, up 15%, compared with the previous week. Borrowers are reacting to improved affordability.  

mortgage applicaition

Mortgage Bankers Association week ending January 20th, 2023.

  • Market Composite Index, a measure of mortgage loan application volume w.e. 20 January 23 rose +7.0% vs +27.9% prior. On an unadjusted basis, the Index increased 1% compared with the previous week. 
  • The Refinance Index increased 15% from the previous week and was 77% lower than the same week one year ago.
  • The seasonally adjusted Purchase Index increased 3% from one week earlier. The unadjusted Purchase Index decreased 1% compared with the previous week and was 39% lower than the same week one year ago.
  • 30-year mortgage rate6.2% vs 6.23% prior
US MBA Mortgage Applications

““Mortgage rates declined for the third straight week, which is good news for potential homebuyers looking ahead to the spring homebuying season. Mortgage rates on most loan types decreased last week and the 30-year fixed rate reached its lowest level since September 2022 at 6.2 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.

“Overall applications increased with both gains in purchase and refinance activity, but purchase applications remained almost 39 percent lower than a year ago. Homebuying activity remains tepid, but if rates continue to fall and home prices cool further, we expect to see potential buyers come back into the market. Many have been waiting for affordability challenges to subside.””

This year’s surge in mortgage rates was hardly unforeseen, given the record lows reached in the pandemic period and concerns about high U.S. inflation readings, but it has unfolded faster than many expected. At the beginning of last year, the average rate on America’s most popular home loan was 3.22%. 

Higher mortgage rates typically slow home-buying activity, but the number of applications. Expectations that the Federal Reserve will raise interest rates several more times this year to control inflation are driving up mortgage rates. Home prices continue to push homeownership out of the question for many Americans.


The survey covers over 75 percent of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100. 

Source: Mortgage Bankers Association of America

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