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Mortgage

Mortgage applications rise to the highest level in more than a month

Refinance applications also climb to the highest level in five weeks

Despite last week’s climb in mortgage rates, the Mortgage Bankers Association indicates demand for both purchase and refinance applications held steady, as mortgage applications rose by 9.6%.

This means on an unadjusted basis, the index jumped 9.6% for the week ending on Nov. 8, 2019.

“Mortgage applications increased to their highest level in over a month, as both purchase and refinance activity rose despite another climb in mortgage rates,” said Joel Kan, MBA’s vice president of economic and industry forecasting. “Positive data on consumer sentiment and growing optimism surrounding the U.S. and China trade dispute were behind last week’s rise in the 30-year fixed mortgage rate to 4.03%.”

Despite this acceleration, Kan said refinance applications jumped 13% to the highest level in five weeks, as conventional, FHA, and VA refinances all posted weekly gains. With rates still in the 4% range, the MBA expects to see moderate growth in refinance activity in the final weeks of 2020, he said.

As for the nation’s purchase environment, Kan said although last week was great for homebuyers, supply constraints continue to hinder growth.

“Last week was a solid week for homebuyers. Purchase applications increased 2% and were 15% higher than a year ago,” Kan said. “Low supply and high home prices remain a key characteristic of this fall’s housing market, which is why the largest growth in activity continues to be in loans with higher loan balances.”

According to the MBA, the seasonally adjusted Purchase Index increased 5% from one week earlier, whereas the unadjusted Purchase Index rose 2% from the previous week.

Here is a more detailed breakdown of this week’s mortgage application data:

  • The refinance share of mortgage activity increased to 61.9% from last week’s 59.5%.
  • The adjustable-rate mortgage share of activity fell to 4.9% of total applications.
  • The Federal Housing Administration’s share of mortgage apps grew to 13.1% from last week’s 11.8%.
  • The Department of Veterans Affair’s share of applications moved forward to 12.7% from last week’s 12%.
  • The Department of Agriculture’s share of total applications slid to 0.5% from last week’s 0.6%.
  • Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased from last week’s rate of 3.98% to 4.03%.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) rose from last week’s 3.97% to 3.98%.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA moved forward to 3.85% from last week’s 3.79%.
  • The average contract interest rate for 15-year fixed-rate mortgages increased from last week’s 3.38% to 3.43%.
  • The average contract interest rate for 5/1 ARMs fell to 3.43% from last week’s 3.4%.

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