Mortgage loan application volume rose 1.8% last week, the Mortgage Bankers Association’s (MBA) weekly survey reports.
The seasonally adjusted Market Composite Index, a measure of mortgage loan application volume, increased 1.8%. The seasonally adjusted purchase index rose 5%, while the unadjusted purchase index dropped 0.4% and was 4% lower YOY.
The report noted that though rates were volatile last week, the net trend is upward, with the 30-year fixed rate rising to 3.24%.
“Despite the increase in rates, refinance applications rose slightly, driven by a 2% gain in conventional refinances. Borrowers continue to lock in mortgages in anticipation of higher rates in the future. Refinance applications were still more than 30% below a year ago when the 30-year fixed rate was 32 basis points lower,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
“Purchase activity increased for the third straight week, as housing demand remains robust, even as the housing market approaches the typically slower holiday season,” he added. “Both conventional and government loan applications increased, and the average loan size for a purchase loan was at $407,200, continuing its ongoing 2021 run of being mostly above $400,000.”
When the holiday season starts, people are typically reluctant to put their homes on the market due to a lack of potential buyers. But this season has broken from that trend. Redfin’s Homebuyer Demand Index hit an all-time high since at least 2017 as the number of listed homes remains seasonally elevated compared to years past.
“The economy is recovering strongly, and mortgage rates are still near all-time lows. Those two forces combined have caused homebuying demand to hit a record high,” said Redfin Chief Economist Daryl Fairweather.
The share of refinance applications rose 0.4%, but it was 34% lower year-over-year. Refinances made up 63.1% of total applications, up from 62.9% the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 3.24% from 3.20%. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances rose from 3.28% to 3.26%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.27% from 3.23%.