A decrease in mortgage rates resulted in mortgage application volume increasing 2.2% during the week ended November 18.
According to the Mortgage Bankers Association’s Weekly Applications Survey, applications for refinances increased 2% compared with the previous week, while applications for purchases increased 3% compared with the previous week.
Still, applications for refinances were down 86% compared with the same week one year earlier. And applications for purchases were down 41% year over year.
“The 30-year fixed-rate mortgage fell for the second week in a row to 6.67% and is now down almost 50 basis points from the recent peak of 7.16% one month ago,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “The decrease in mortgage rates should improve the purchasing power of prospective homebuyers, who have been largely sidelined as mortgage rates have more than doubled in the past year.
“As a result of the drop in mortgage rates, both purchase and refinance applications picked up slightly last week,” Kan says. “However, refinance activity is still more than 80 percent below last year’s pace.”
The refinance share of mortgage activity increased to 28.4% of total applications, up from 27.6% the previous week.
The adjustable-rate mortgage (ARM) share of activity decreased to 8.8% of total applications
“With the decline in rates, the ARM share of applications also decreased to 8.8 percent of loans last week, down from the range of 10 and 12 percent during the past two months,” Kan says.
The FHA share of total applications decreased to 13.4% from 13.5% the week prior. The VA share of total applications decreased to 10.5% from 10.6% the week prior. The USDA share of total applications remained unchanged at 0.6% from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 6.67% from 6.90%, with points increasing to 0.68% from 0.56% (including the origination fee) for 80 loan-to-value ratio (LTV) loans.
The effective rate decreased from last week.
Photo: Romain Dancre
