Mortgage demand rose slightly last week as mortgage rates decreased for the fourth time in five weeks, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
For the week ending November 24, total mortgage applications increased 0.3% compared to the prior week, the survey showed. The results include an adjustment for the observance of the Thanksgiving holiday.
Despite the recent dip in mortgage rates, the rates remain high and have kept conditions challenging for both prospective homebuyers and homeowners looking to sell. They have also continued to suppress refinance activity.
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"Mortgage rates decreased for the fourth time in five weeks, with the 30-year fixed rate dipping to 7.37 percent, the lowest level in 10 weeks,” said Joel Kan, MBA vice president and deputy chief economist. "Rates have declined more than 50 basis points over the past six weeks, which has helped to spur a small increase in purchase applications, but activity last week was still around 20 percent lower than a year ago.”
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Mortgage application highlights
The Market Composite Index, which measures mortgage loan application volume, increased 0.3% on a seasonally adjusted basis from the prior week, and decreased 33% on an unadjusted basis, MBA said.
The Purchase Index increased 5% on a seasonally adjusted basis, compared to the prior week. On an unadjusted basis, the index decreased 31% from the prior week and fell 19% from the same week a year ago.
The Refinance Index, which measures refinancing and prepayment activity, decreased 9% from the prior week and was 1% higher than the same week a year ago. The refinance share of mortgage activity decreased to 30.6% of total applications from 32.4% the previous week.
The FHA share of total applications decreased to 13.5% from 14.8% the prior week. The VA share increased to 12.6%, from 11.3% in the week prior, and the USDA share increased to 0.5% from 0.4% in the week prior.
“The purchase market remains depressed because of the ongoing, low supply of existing homes on the market,” Kan said. "Similarly, refinance activity will likely be muted for some time, even with the recent decline in rates, as many borrowers locked in much lower rates in 2020 and 2021.”
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