Mortgage applications increased 2% from one week earlier, according to data from the Mortgage Bankers Association‘s (MBA) Weekly Mortgage Applications Survey for the week ending December 3.
The previous week’s results included an adjustment for the Thanksgiving holiday.
The Refinance Index increased 9% from the previous week and was 37% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 5% from one week earlier. The unadjusted Purchase Index increased 28% compared with the previous week and was 8% lower than the same week one year ago.
“Mortgage rates declined for the first time in a month, prompting a pickup in refinancing, with government refinances increasing more than 20 percent over the week,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting. “While the 30-year fixed mortgage rate and 15-year fixed mortgage rate both declined only one basis point, the FHA rate fell 7 basis points, driving the surge in government refinances. Borrowers are continuing to act on these opportunities, but if rates trend higher as MBA is forecasting, the window of opportunity to refinance will continue to get smaller.
“The purchase market was slower last week, with applications falling after four consecutive increases,” Kan continues. “Activity is still close to the highest level since March 2021, which is a positive sign as the year comes to an end. Purchase activity continues to be constrained by a lack of inventory, combined with rapid rates of home-price appreciation and mortgage rates higher than in 2020.”
The refinance share of mortgage activity increased to 63.9% of total applications from 59.4% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 3% of total applications.
The FHA share of total applications increased to 9.9% from 8.9% the week prior. The VA share of total applications increased to 10.7% from 10% the week prior. The USDA share of total applications remained unchanged from 0.5% the week prior.
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