The number of mortgage applications is increasing slightly, reversing a recent trend
Demand for mortgages rose for the first time in seven weeks, as applications rose 0.5% in the week ending November 8. Association of Mortgage Bankers (MBA) reported Wednesday.
Demand for purchase loans drove the slight increase in the MBA’s Market Composite Index, which measures the volume of loan applications. The purchasing index increased seasonally by 2% compared to the previous week. However, refinancings fell by 2%, while mortgage rates continue to rise by almost 7% HousingWire‘s Mortgage Interest Center.
On an annual basis, the purchase index rose by 1% and the refi index by 43%.
“Mortgage rates continued to rise last week, driven by higher Treasury yields, as financial markets digested the likely fallout from a Trump presidency,” Joel Kan, deputy chief economist at the MBA, said in a statement. “The Federal ReserveThe 25 basis point interest rate cut was already anticipated and brought little change to the markets.
“The 30-year yield stood at 6.86 percent last week, the highest level since July 2024. However, despite the rate increase, applications increased for the first time in seven weeks.”
The refinance share of mortgage applications remained unchanged during the week at 39.9%, while the share of adjustable-rate mortgages (ARMs) fell to 6.5%.
Government lending was another bright spot in the report as applications for Federal Housing Administration (FHA) loans increased their share to 16%, up from 15.5% a week ago, while applications for The U.S. Department of Veterans Affairs (VA) loans rose from 12.5% to 13.3% over the week.
“Purchase requests increased and remained close to year-ago levels,” Kan said. “FHA and VA purchase applications drove the stronger overall purchasing activity, up 3 percent and 9 percent, respectively. FHA mortgage rates bucked the general trend and were lower this week, likely benefiting some borrowers. Conventional purchase requests also rose slightly. Meanwhile, the upward rise in yields has caused refinancing activity to fall to its lowest level since May 2024.”
The average contract rate for 30-year fixed-rate mortgages with a conforming loan balance of $766,550 or less fell 5 basis points to end the week at 6.81%. Rates for 30-year jumbo loans (balances above $766,550) increased 2 basis points to 7%.
FHA loan applications also saw rates drop during the week, down 6 basis points to 6.69%. Rates for 5/1 ARMs rose 1 basis point to an average of 6.06%, while those for 15-year fixed loans were unchanged at 6.21%
The MBA’s weekly mortgage application survey was benchmarked to 100 in March 1990. It covers all closed residential mortgage applications originating through private and direct consumer channels.
