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Mortgage applications rose for the second straight week as key interest rates fell back toward 5%, according to the Mortgage Bankers Association.
The MBA’s Weekly Mortgage Applications Survey for the week ending Nov. 30 found that total application volume was up 2% and the refinance index increased 6% from the previous week. The results for the week ending Nov. 23 included an adjustment for the Thanksgiving holiday.
The refinance share of mortgage activity increased to 40.4% of total applications from 37.9% the previous week.
The seasonally adjusted purchase index increased 1% from one week earlier, while the unadjusted purchase index increased 36% compared with the previous week and was 0.2% higher than the same week one year ago.
“Treasury rates continued to slide last week, driven mainly by concerns over slowing global economic growth and U.S. and China trade uncertainty,” said Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a press release. “The 30-year fixed-rate fell for the third week in a row to 5.08% and has declined a total of nine basis points over this span.”
A more accurate comparison to this week’s activity is with the week ended Nov. 16, when refi activity was at an 18-year low, he continued.
“Application activity increased over the week for both purchase and refinance loans, and were 10% and 7% higher, respectively, than the week before the Thanksgiving holiday,” Kan said. “Additionally, we saw a decrease in the average loan size for purchase applications to the lowest since December 2017 ($298,000 from $313,000). This is perhaps an indication that there are fewer jumbo borrowers, or maybe first-time buyers are having better success reaching the market as we close out the year.”
Adjustable-rate loan activity decreased to 7.4% from 7.9% of total applications, while the share of Federal Housing Administration-guaranteed loans increased to 10.2% from 9.6% the week prior.
The share of applications for Veterans Affairs-guaranteed loans increased to 10% from 9.9% and the U.S. Department of Agriculture/Rural Development share decreased to 0.6% 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 5.08%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $453,100), the average contract rate increased 1 basis point to 4.89%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 6 basis points to 5.05%. For 15-year fixed-rate mortgages, the average decreased 3 basis points to 4.5%.
The average contract interest rate for 5/1 ARMs increased 4 basis points to 4.33%.