After seven weeks of decline, there was a slight increase in mortgage demand with applications rising by 0.5% in the week ending Nov. 8, according to the Mortgage Bankers Association (MBA).
The rise in the MBA’s Market Composite Index was primarily driven by an increase in purchase loan demand, which saw a 2% rise from the previous week on a seasonally adjusted basis. However, refinances were down by 2% as mortgage rates approached 7%, as reported by HousingWire‘s Mortgage Rates Center.
On a year-over-year basis, the purchase index was up by 1% while the refi index saw a significant increase of 43%.
Joel Kan, the MBA’s deputy chief economist, mentioned that mortgage rates continued to rise due to higher Treasury yields following the implications of a Trump presidency. Despite this increase, mortgage applications saw an uptick for the first time in seven weeks.
The refinance share of mortgage applications held steady at 39.9% while adjustable-rate mortgages (ARMs) saw a decrease in their share to 6.5%.
Government lending activity showed positive growth with an increase in applications for Federal Housing Administration (FHA) loans and U.S. Department of Veterans Affairs (VA) loans.
Overall, purchase applications remained close to levels from a year ago, with FHA and VA purchase applications driving stronger overall purchase activity. However, refinance activity fell to its lowest level since May 2024 due to the upward trend in rates.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased slightly to 6.81%, while rates for jumbo loans increased to 7%.
Notably, FHA loan applications saw a decrease in interest rates, and rates for 5/1 ARMs and 15-year fixed loans also experienced changes during the week.
The MBA’s weekly mortgage applications survey provides valuable insights into the residential mortgage market, covering applications originated through various channels.
Related