Applications Improve On Cooling Rates

Mortgage applications increased before and after the Thanksgiving holiday as rates tempered and inventory improved.

The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — rose by 2.8% last week, adding to the week prior’s 6.3% bump.

This marks a fourth consecutive week of gains. Rates, which had been steadily growing through November, fell to their lowest point in more than a month at 6.69%. Greater activity followed.

“The recent strength in purchase activity continues, supported by lower rates and higher inventory levels, which are giving prospective buyers more options compared to earlier in the year. The purchase index increased for the fourth straight week to its highest level since January 2024. Conventional refinance applications declined despite the lower rates, but FHA and VA refinances rebounded from a week ago,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.

Adjusted purchase applications were up by 6% on the week, while the unadjusted index was down 30% and 21% lower year-over-year.

Realtor.com expects mortgage rates to stay above 6% through 2025. The incoming Trump administration’s policies “have the potential to enhance or hamper the housing recovery,” their experts say. 

But many changes would require the assistance of other branches of government, which means they’re unlikely to roll out fast.

“The size and direction of a Trump bump will depend on what campaign proposals ultimately become policy and when. For now, we expect a gradual improvement in housing market dynamics powered by broader economic factors,” Danielle Hale, chief economist for Realtor.com, commented.

Activity should soften through January 1st because of Christmas and New Year’s. But savvy sellers can still attract buyers with a positive attitude and a dose of holiday spirit.