Mortgage application activity staged a moderately strong recovery from the previous holiday-shortened week, although the recovery was attributable solely to the refinance side of the business. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage application volume, increased 3.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index was up 30 percent. The Refinance Index surged by 15.0 percent compared to the previous week and was 37 percent higher than the same week one year ago. The refinance share of mortgage activity jumped to 38.8 percent of total applications from 34.9 percent and was the largest since mid-December 2023. [refiappschart] Purchasing on the other hand declined 3.0 percent after seasonal adjustment although it was up 22 percent before it. The Purchase Index was 14 percent lower than during the same week one year ago. [purchaseappschart] “Mortgage rates declined last week, as recent signs of cooling inflation and the increased likelihood of Fed rate cuts later this year pulled them lower. The 30-year fixed rate declined to 6.87 percent, the lowest rate since March 2024,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “ Application activity was up 4 percent, driven by a 15 percent jump in refinances to the highest level since August 2022. While FHA and VA refinance applications accounted for a significant share of the increase, these are likely recently originated loans with even higher than current offered rates. Even with last week’s rate decline, purchase applications continue to lag, down 14 percent compared to last year’s pace.”