The rush in holiday shopping also boosted the housing market as mortgage applications increased 5.5% from one week earlier, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending Nov. 23 found that the refinance index increased 1%
The refinance share of mortgage activity decreased to 37.9% of total applications from 38.5% the previous week.
The seasonally adjusted purchase index increased 9% from one week earlier, while the unadjusted purchase index decreased 28% compared with the previous week and was 2% higher than the same week one year ago.
"After several weeks of market volatility, 30-year fixed mortgage rates decreased last week. Homebuyers responded, with purchase applications 1.7% higher than a year ago, and after adjusting for the Thanksgiving holiday, they increased almost 9% from the previous week," Mike Fratantoni, the MBA's chief economist, said in a press release.
"The rise in purchase activity was led by conventional purchase applications, which surged almost 12%, while government purchases were essentially unchanged over the week. This also pushed the average loan size for purchase applications higher, which likely meant there were fewer first-time homebuyers in the market last week."
Adjustable-rate loan activity increased to 7.9% from 7.3% of total applications, while the share of Federal Housing Administration-guaranteed loans decreased to 9.6% from 10.7% the week prior.
The share of applications for Veterans Affairs-guaranteed loans decreased to 9.9% from 10.6% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.7% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased 4 basis points to 5.12%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate remained unchanged at 4.88%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 3 basis points to 5.11%. For 15-year fixed-rate mortgages, the average remained unchanged at 4.53%.
The average contract interest rate for 5/1 ARMs increased to 5 basis points to 4.29%.
