Due mainly to a significant hike in mortgage interest rates, which came in reaction to the election results, mortgage application volume decreased 9.2% on an adjusted basis during the week ended Nov. 11, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.
Applications for refinances decreased 11%, while applications for purchases fell 6%.
It was the fourth consecutive week that mortgage application volume decreased.
On an unadjusted basis, total volume decreased 10% compared with the previous week. Applications for purchases decreased 10% on an unadjusted basis but increased 3% compared with the same week one year earlier.
The refinance share of mortgage activity decreased to 61.9% of total applications from 62.3% the previous week.
“Following the election, mortgage rates saw their biggest week over week increase since the taper tantrum in June 2013, and reached their highest level since January of this year,” says David H. Stevens, CMB, president and CEO of the MBA, in a statement. “Investor expectations of faster growth and higher inflation are driving the jump up in rates, and rates have now increased for five of the past six weeks, spurring a commensurate drop in refinance activity.”
The average rate for a 30-year fixed-rate mortgage (FRM) was 3.95%, up from 3.77% to reach the highest level since January.
The average rate for a 30-year jumbo FRM was 3.89%, up from 3.75%. This was also the highest it has been since January.
The average rate for a 30-year FRM backed by the Federal Housing Administration (FHA) was 3.73%, up from 3.61%.
The average rate for a 15-year FRM was 3.15%, up from 3.03%.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.11%, up from 2.92%.
The ARM share of activity increased to 4.7% of total applications.
Applications for mortgages backed by the FHA represented 12.2% of all applications, up from 11.6% the week prior. The Veterans Affairs share of total applications was 12.6%, up from 12.3%. The U.S. Department of Agriculture share of total applications was 0.6%, down slightly from 0.7%.