The Mortgage Bankers Association's Weekly Mortgage Application Survey reported a 0.6% decrease in mortgage applications for the week ending Nov. 27, 2020. This includes an adjustment for the Thanksgiving holiday. While applications were down overall, the MBA reported an increase in purchase applications and a dip in refinance applications.
Despite a 5% decrease in the Refinance Index, the index was still 102% higher than the same period in 2019. Refis and purchases look to be switching roles as the Purchase Index increased 9% on an adjusted basis and 28% on an unadjusted basis. The Purchase Index was also up 28% from the same period in 2019.
"After adjusting for the Thanksgiving holiday, mortgage applications were mixed, with a jump in purchase applications and a decline in refinances. 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," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "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. Housing demand remains strong, and despite extremely tight inventory and rising prices, home sales are running at their strongest pace in over a decade."
"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," added Kan.
Additionally, the refinance share of mortgage activity decreased to 69.5% of total applications, down from 71.1% the previous week. The adjustable-rate mortgage share of activity decreased to 1.8% of total applications.
The FHA share of mortgage activity decreased to 9.1% of total applications, the VA share increased to 11.9% and the USDA share remained unchanged from 0.4%, according to the report.