Mortgage Applications Decline 5.2% as Rates Climb to Four-Week High
Mortgage application volume fell 5.2% during the week ending November 24th, according to data released Wednesday by the Mortgage Bankers Association (MBA). The decline follows three consecutive weeks of rising mortgage rates, which are now at their highest level in four weeks.
The MBA’s refinance index decreased 7% from the previous week, though it remains 125% higher than the same week one year ago. Refinance activity accounted for 55.4% of total applications, down slightly from 55.6% the prior week.
“Mortgage rates increased for the third consecutive week, with the 30-year fixed rate inching higher to its highest level in four weeks at 6.37%,” said joel Kan, MBA’s vice president and deputy chief economist. “Application activity over the week was lower, with potential homebuyers moving to the sidelines again, although there was a small increase in FHA purchase applications.”
The seasonally adjusted purchase index decreased by 2% week-over-week. The unadjusted purchase index fell 7% compared to the previous week but was 26% higher than the same week in 2023.
Borrower sensitivity to rate increases contributed to the overall decline, with the average loan size dipping to its lowest level since August. The adjustable-rate mortgage (ARM) share of activity decreased to 7.5% of all applications.
Government-backed loan programs saw shifts in market share. The Federal Housing Administration (FHA) share of applications increased to 19.9%, up from 19.4% the week prior. The U.S. Department of Veterans Affairs (VA) share rose 60 basis points to 15.2%, and the U.S.Department of Agriculture (USDA) share increased 10 basis points to 0.3%.
Interest rates presented a mixed picture. While the average contract interest rate for 30-year fixed mortgages increased, rates for 30-year fixed loans with jumbo balances decreased by 7 basis points to 6.39%. The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 6.14%,while the rate for 15-year fixed mortgages increased 13 basis points to 5.83%. Rates for 5/1 ARMs increased 15 basis points to 5.65%.