According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey, mortgage applications are up 5.4% as of December 6th, continuing a three-week pattern of growth.
While the previous week’s data reflects adjustments for the Thanksgiving holiday, consumers are back in the swing of things, shirking turkey comas in favor of the opportunity for lower mortgage rates.
The Refinance Index surged 27%, 42% higher than the same week a year ago, driven by a drop in mortgage rates to 6.67%.
“Mortgage rates decreased again for the third consecutive week, with the 30-year fixed rate dipping to 6.67%,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Applications increased 5%, driven by a 27% surge in refinance activity, as borrowers with higher rates acted on the chance to lower their payments. VA refinance applications were up 85% from the previous week, matching some of the larger swings in VA activity reported in recent months.”
And while rates have not hit the same 2.77% averages of 2021, buyers appear hopeful about the future of mortgage rates, confident that things will carry on improving into the new year despite forecasts of continually high home prices.
“Purchase applications remained relatively strong and have shown annual gains in all but one week over the past three months,” Kan noted. “In addition to lower rates, purchase activity continues to be supported by sustained housing demand and inventory that continues to grow gradually in many markets.”
The refinance share of mortgage activity rose to 46.8% from 38.7%, while the adjustable-rate mortgage (ARM) share dropped to 5.3%. The FHA and VA shares of total applications increased, while the USDA share remained steady.
In terms of interest rates, the average contract rate for 30-year fixed mortgages with conforming loans decreased to 6.67%, while jumbo loan rates fell to 6.79%. FHA-backed mortgage rates decreased to 6.47%.
