Mortgage applications rise by 6.3% as interest rates level off
Mortgage applications rose 6.3% on a seasonally adjusted basis during the week ended Nov. 22, driven by a 12% increase in demand for purchase loans, according to data released Wednesday by the Association of Mortgage Bankers (MBA).
It’s the third consecutive weekly increase in applications — a good sign for mortgage lenders heading into the typically slow Thanksgiving holiday. Demand is growing as the rise in mortgage rates levels off after several weeks of upward movement. HousingWire‘s Mortgage Rates Center on Wednesday showed the average 30-year conforming rate at 7.02%, up 3 basis points (bps) from a week ago.
Although refinance applications fell 3% from the previous week, they remained up 119% year over year. But the increase in purchasing demand also caused the refinancing share of mortgage activity to decline by 220 basis points during the week. Refis accounted for 38.8% of all applications last week.
“Purchasing activity pushed overall applications higher last week as conventional purchase applications accelerated and mortgage rates fell for the first time in more than two months,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. declaration.
“With the growth of for-sale inventory and signs that the economy remains strong, buyers have remained in the market even as rates have risen recently. The increase in conventional purchase applications helped push the average purchase loan size to $439,200, the highest level in nearly a month. The decline in refinance activity was driven by declines in FHA and VA refinances. Applications were significantly higher than a year ago by most measures, but this was compared to the week of Thanksgiving 2023, which was a week earlier than this year’s holiday.”
Adjustable rate mortgages (ARMs) rose to 6.6% of applications. But government bonds saw their shares shrink. Federal Housing Administration (FHA) loans fell 60 basis points during the week, representing 16% of all applications The U.S. Department of Veterans Affairs (VA) loans fell by 120 basis points to 12.4% of applications.
The MBA reported that the average contract rate for 30-year fixed-rate loans with conforming balances ($766,550 or less) fell 4 basis points during the week to 6.86%. Interest rates for 30-year jumbo loans (balances above $766,550) fell 6 basis points to average 6.97%.
The average contract rate for 30-year fixed-rate mortgages with a conforming loan balance ($766,550 or less) fell from 6.90 percent to 6.86 percent, while points remained unchanged at 0.70 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased compared to last week.
The Federal Agency for Housing Financing (FHFA) this week announced changes to the conforming loan limits for 2025. Beginning January 1, Fannie Mae and Freddie Mac will purchase loans with balances up to $806,500 – a 5.2% increase over the current limit consistent with the increase of house prices. .
