Mortgage applications increased 3.9% from one week earlier as another week of record low rates drew more borrowers into the market, according to the Mortgage Bankers Association.
“Weekly mortgage rate volatility has emerged again, as markets respond to fiscal policy uncertainty and a resurgence in COVID-19 cases around the country,” Joel Kan, the MBA’s associate vice president of industry and economic forecasting, said in a press release. “The decline in rates ignited borrower interest, with applications for both home purchases and refinancing increasing on a weekly and annual basis.”
The MBA’s Weekly Mortgage Applications Survey for the week ending Nov. 20 found that the refinance index increased 5%from the previous weekand was 79% higher than the same week one year ago. The refinance share of mortgage activity increased to 71.1% of total applications from 69.8% the previous week.
“The ongoing refinance wave has continued into November,” Kan explained. “Both the refinance index and the share of refinance applications were at their highest levels since April, as another week of lower rates drew more conventional loan borrowers into the market.”
The seasonally adjusted purchase index increased 4% from one week earlier, while the unadjusted purchase index decreased 2% compared with the previous week and was 19% higher than the same week one year ago.
“Amidst strong competition for a limited supply of homes for sale, as well as rapidly increasing home prices, purchase applications increased for both conventional and government borrowers. Furthermore, purchase activity has surpassed year-ago levels for over six months,” Kan noted.
Adjustable-rate mortgage activity remained unchanged at 1.9% of total applications, while the share of Federal Housing Administration-insured loan applications decreased to 10% from 10.5% the week prior.
Veterans Affairs-guaranteed loans saw their share decrease to 11.8% from 12.1% and the U.S. Department of Agriculture/Rural Development share fell to 0.4% from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased 7 basis points to 2.92%, the lowest since the MBA started tracking this data.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 12 basis points to 2.99%.
For 15-year fixed-rate mortgages, the average decreased 8 points to 2.51%. The average contract interest rate for 5/1 ARMs decreased to 2.63% from 2.84%.
But that downward movement did not transfer to all product types. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400), the average contract rate increased 7 basis points to 3.18%.
