Mortgage applications rose 2.8% on a seasonally adjusted basis during the week ended Nov. 29 as borrowers benefited from improved inventory levels and the lowest mortgage rates in a month, according to data released Wednesday by the Association of Mortgage Bankers (MBA).
The purchase loans increased total applications last week, including an adjustment for the Thanksgiving holiday. The seasonally adjusted purchasing index rose 6% from the previous week. However, unadjusted, purchase requests were 21% lower than in the same week last year.
“The recent strength in purchasing activity continues, supported by lower rates and higher inventory levels, giving potential buyers more options compared to earlier this year,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. “The purchasing index rose for the fourth week in a row to the highest level since January 2024.”
Meanwhile, refinancing applications fell by 1% compared to the week before and by 7% compared to the same week in 2023. Refis represented 38.7% of all applications last week. “Conventional refinance applications fell despite lower rates, but FHA and VA refinances rebounded from a week ago,” Kan noted.
According to HousingWireThe average 30-year conforming mortgage rate was 6.96% on Wednesday, down 6 basis points (bps) from a week ago, according to the Mortgage Rates Center.
The MBA reported that the average contract rate for 30-year fixed-rate loans with conforming balances ($766,550 or less) fell 17 basis points during the week to 6.69%, the lowest level in more than a month, according to Kan.
Interest rates for 30-year jumbo loans (balances above $766,550) fell 12 basis points to average 6.85%. By 2025, jumbo loans will increase to a minimum amount of $806,501 – a 5.2% increase from the current floor, which is consistent with home price growth, according to an announcement last week from the Federal Agency for Housing Financing (FHFA).
Adjustable-rate mortgages (ARMs) accounted for 6% of applications last week, up from 6.6% the week before. But government loans showed a slightly increasing trend. Federal Housing Administration (FHA) loans remained at 16% of all applications. The U.S. Department of Veterans Affairs (VA) loans grew their share to 13.6%, up from 12.4% the week before. US Department of Agriculture (USDA) loans fell 1 basis point to 0.4%.
