Mortgage applications decreased 0.6% on a seasonally adjusted basis from one week earlier as the period was truncated by the Thanksgiving holiday, according to the Mortgage Bankers Association.
The MBA’s Weekly Mortgage Applications Survey for the week ending Nov. 27 found that the unadjusted refinance index decreased 5%
On an unadjusted basis, total application volume was down 32% from the prior week.
“After adjusting for the Thanksgiving holiday, mortgage applications were mixed, with a jump in purchase applications and a decline in refinances,” Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a press release. “Purchase activity continued to show impressive year-over-year gains, with both the conventional and government segments of the market posting another week of growth.”
The seasonally adjusted purchase index increased 9% from one week earlier. But because of Thanksgiving, the unadjusted purchase index decreased 28% compared with the previous week although it was 28% higher than the same week one year ago.
“Purchase loan amounts continue to be significantly higher than their average over the past decade and hit $375,000 last week, the largest since the inception of MBA’s survey in 1990," Kan said. “Housing demand remains strong, and despite extremely tight inventory and rising prices, home sales are running at their strongest pace in over a decade.”
Adjustable-rate mortgage activity decreased to 1.8% from 1.9% of total applications, while the share of Federal Housing Administration-insured loan applications decreased to 9.1% from 10% the week prior.
Veterans Affairs-guaranteed loans saw their share increased to 11.9% from 11.8% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.4% the week prior.
Mortgage rates remained at or near record low levels during the survey period. However, on Dec. 1, as investors embraced the news of a possible new stimulus package, the benchmark 10-year Treasury yield rose nearly 8 basis points on the day to close at 0.94%.
However, recent commentary from product and pricing engine
“The sustained period of low mortgage rates continues to spark borrower demand, and the mortgage industry is poised for its strongest year in originations since 2003. The ongoing refinance wave has been beneficial to homeowners looking to lower their monthly payments during these challenging economic times brought forth by the pandemic,” Kan added.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) remained unchanged at 2.92%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400), the average increased 1 basis point to 3.19%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 1 basis point to 3%. For 15-year fixed-rate mortgages, the average increased 2 basis points to 2.53%. The average contract interest rate for 5/1 ARMs remained unchanged at 2.63%.
