According to the Mortgage Bankers Association (MBA) data, the overall market composite index, measuring the volume of mortgage loan applications, increased by 10.4% last week, reaching 210.5. Although there is still a gap compared to the 239.2 from a year ago, there are clear signs of recovery. Specifically, the purchase index, measuring mortgage loan applications for home purchases, rose by 9.2%, while the refinance index increased by 10.8%. Particularly noteworthy is the significant increase in refinance applications for traditional mortgage loans.

This growth trend can be attributed to the overall decline in interest rates. As of the week ending January 12th, the average interest rate for a 30-year mortgage was 6.75%, the lowest level in the past three weeks. The interest rate for mortgages on homes priced below $726,200 is 6.75%, a decrease of 0.06 percentage points from the previous week.

For jumbo loans (30-year home mortgages with prices exceeding $726,200), the interest rate is 6.86%, a decrease of 0.12 percentage points from the previous week. In addition, the average interest rate for 30-year mortgages backed by the Federal Housing Administration dropped from 6.56% to 6.46%, the average interest rate for 15-year mortgages increased from 6.41% to 6.24%, and the adjustable-rate mortgage rate rose from 6.17% to 6.14%.

The low-interest-rate environment has positively impacted the real estate market, attracting more attention from homebuyers and prompting reconsideration of home purchase decisions. Additionally, low-interest rates have enticed homeowners with previously unwillingness to sell, increasing the overall supply in the market. This phenomenon has also contributed to some extent to rising home prices.

However, it's important to note that current home buying activities still lag behind the levels of the same period last year. Despite improvements in refinancing applications, overall activity remains relatively low. Joel Kan, Vice President and Deputy Chief Economist at the MBA, cautions that if interest rates continue to ease, the MBA maintains a cautiously optimistic outlook for the future rebound in home purchases over the next few months.