Despite an uptick in mortgage rates at the beginning of 2024, mortgage demand surged after adjusting for the holiday.

Mortgage applications increased 9.9% for the week ending Jan. 5 compared to one week earlier, according to data from the Mortgage Bankers Association (MBA).

The 30-year fixed mortgage rate averaged 6.62% as of Jan. 4, according to Freddie Mac’s Primary Mortgage Market Survey.

“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, MBA’s vice president and deputy chief economist, said in a statement. “Mortgage rates and applications have been volatile in recent weeks and overall activity remains low.”

Purchase applications rose by 6% week over week on an adjusted basis. Meanwhile, refinance applications were 19% higher than a year ago.

The share of Federal Housing Administration (FHA) loan activity decreased to 14.4% from 14.5% the week prior. The share of Department of Veterans Affairs (VA) loan activity was 16.3%, up from 14.6% over the previous week, while the share of U.S. Department of Agriculture (USDA) loan activity decreased to 0.4% compared to 0.5% the previous week.

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