
During the week ending November 29, mortgage applications experienced a notable increase of 2.8%.
Borrowers took advantage of a favorable housing market with improved inventory and the lowest mortgage rates seen in a month, as reported by the Mortgage Bankers Association (MBA).
Increase in Purchase Loans
The rise in applications was primarily attributed to a boost in purchase loans, which showed a rebound despite adjustments for the Thanksgiving holiday.
The seasonally adjusted purchase index climbed by 6% compared to the previous week.
However, year-over-year comparisons reveal that unadjusted purchase applications have dropped by 21%.
According to the MBA’s vice president and deputy chief economist, the recent uptick in purchase activity can be linked to the declining interest rates and a greater selection of available homes on the market.
This marks the fourth week of growth for the purchase index, which has reached its highest point since January 2024.
Refinance Applications and Rates
Conversely, refinance applications took a slight hit, dropping by 1% from the previous week, and they were down 7% when compared to the same time last year.
Refinancing made up 38.7% of all mortgage applications last week.
The MBA official pointed out that despite lower rates, traditional refinance applications are on the decline.
However, there’s been a noticeable increase in refinancing activity for FHA and VA loans.
According to data from HousingWire’s Mortgage Rates Center, the average rate for a 30-year conforming loan settled at 6.96% on Wednesday, a decrease of 6 basis points from the week before.
The MBA also reported that the average contract interest rate for 30-year fixed loans with conforming balances (which cap at $766,550) fell by 17 basis points to 6.69%, the lowest level in over a month.
Market Trends and Predictions
For jumbo loans—those exceeding $766,550—the average rate saw a reduction of 12 basis points, landing at 6.85%.
Looking ahead, 2025 will bring an increase in jumbo loan limits to a minimum of $806,501, a rise of 5.2% in alignment with home price escalations, as indicated by the Federal Housing Finance Agency (FHFA).
In the realm of adjustable-rate mortgages (ARMs), their share of total applications decreased to 6%, down from 6.6% the previous week.
Meanwhile, government-backed loan applications experienced a small increase.
FHA loans maintained their steady 16% share, while VA loans rose to 13.6%, up from 12.4% the week prior.
Only USDA loans saw a slight decline, slipping 1 basis point to account for 0.4% of applications.
Overall, the mortgage landscape is evolving, with borrowers increasingly drawn to competitive rates and a broader selection of homes.
Source: Housingwire