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Mortgage Applications Show 2.8% Surge As Borrowers Seize Opportunity Amid Stable Rates

Christine Stuart
Nov 15, 2023
mortgage application

Data from MBA's Weekly Mortgage Applications Survey reveals purchase and refinance applications increased to the highest weekly pace in five weeks

Last week, mortgage applications saw a notable increase of 2.8% compared to the previous week, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. This surge was reflected in various segments of the mortgage market.

The Market Composite Index, which measures mortgage loan application volume, grew by 2.8% on a seasonally adjusted basis week-over-week. On an unadjusted basis, the index showed a more modest increase of 0.4% compared to the prior week.

The Refinance Index, which tracks applications for refinancing existing mortgages, experienced a 2% increase from the previous week and was notably 7% higher than the same week one year ago.

In the purchase market, the seasonally adjusted Purchase Index witnessed a 3% increase from the previous week, demonstrating renewed activity. However, the unadjusted Purchase Index displayed a slight decline of 0.3% compared to the prior week and was 12% lower than the same week in the previous year.

“Although Treasury rates dipped midweek, mortgage rates were little changed on average through the week. The 30-year fixed mortgage rate remained at 7.61 percent, about 30 basis points lower than three weeks ago,” said Joel Kan, MBA’s deputy chief economist. “Both purchase and refinance applications increased to the highest weekly pace in five weeks but remain at very low levels. Despite the recent downward trend, mortgage rates at current levels are still challenging for many prospective homebuyers and current homeowners.” 

The refinance share of mortgage activity increased slightly to 31.9% of total applications, up from 31.4% the previous week. In contrast, the adjustable-rate mortgage (ARM) share of activity decreased, accounting for 8.8% of total applications.

Breaking down application activity by loan type, the FHA share of total applications decreased to 14.4% from 14.7% the previous week, while the VA share of total applications increased to 11.2% from 10.5% in the prior week. The USDA share of total applications remained unchanged at 0.5%.

In terms of interest rates, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) held steady at 7.61%. Points decreased slightly to 0.67 from 0.69, including the origination fee, for 80% loan-to-value ratio (LTV) loans.

For 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200), the average contract interest rate increased to 7.65% from 7.58%, with points rising to 0.67 from 0.65 for 80% LTV loans.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 7.36%. Points decreased to 0.85 from 0.91 for 80% LTV loans.

For 15-year fixed-rate mortgages, the average contract interest rate decreased to 6.94% from 6.98%, while points increased to 1.00 from 0.88 for 80% LTV loans.

Lastly, the average contract interest rate for 5/1 adjustable-rate mortgages (ARMs) decreased to 6.65% from 6.76%, with points decreasing to 0.72 from 0.80 for 80% LTV loans.

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