Mortgage application volume decreased 2.2% on an adjusted basis during the week ended Nov. 15, as the average rate for a 30-year, fixed-rate mortgage fell to 3.99%, down from 4.03%, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
The results include an adjustment for the Veterans Day holiday.
Despite the decrease in mortgage rates, applications for refinances fell 8%, while applications for purchases increased 7%.
Although refinance activity dropped, applications for refinances were still up 152% compared with the same week one year earlier.
On an unadjusted basis, total volume fell 14% compared with the previous week. Applications for purchases fell 8% on an unadjusted basis but were up 7% compared with the same week one year earlier.
“U.S. and China trade anxieties and protests in Hong Kong pulled U.S. Treasuries lower last week, and the 30-year fixed mortgage rate followed the same path, dipping below four percent,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Despite lower rates, mortgage applications decreased 2.2 percent, driven by an eight percent slide in refinance activity. Rates have stayed in the same narrow range of around four percent since July, so we may be starting to see the expected slowdown in refinancing as the pool of eligible homeowners shrinks.”
Kan says the annual increase in purchase applications “adds another solid data point to the recent increases in new home sales and housing starts.”
“There may be signs that housing inventory is starting to meaningfully rise, which will help with affordability and provide more choices for potential homebuyers,” he says.
The refinance share of mortgage activity fell to 59.5% of total applications, down from 61.9% the previous week.
The adjustable-rate mortgage (ARM) share of activity decreased to 4.6% of total applications.
Total mortgage application volume has see-sawed for the past five weeks or more. The previous week, total volume increased 9.6%. The week prior, volume dipped slightly and was down 0.1%. The week prior to that, volume increased 0.6% and the week before that total volume dropped 11.9%. All the while, rates have hovered around 4%.