A 19% increase in applications for purchases helped boost total application volume to 5.5% during the week ended Nov. 18, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.
The sharp increase in applications for purchases was offset by a 3% decrease in applications for refinances, stemming mainly from the fact that mortgage rates jumped significantly following the election.
It was the lowest number of applications for refinances since January, the MBA says.
On an unadjusted basis, total volume increased 3% compared with the previous week. Applications for purchases increased 13% on an unadjusted basis and increased 11% compared with the same week one year earlier.
“Mortgage rates have continued to move higher in the post-election period, as investors worldwide are looking for increases in growth and inflation, with the 30-year mortgage rate reaching its highest weekly average since the beginning of 2016,” explains Michael Fratantoni, chief economist and senior vice president of research and technology at the MBA, in a statement. “Refinance volume dropped further over the week, particularly for refinances of Federal Housing Administration [FHA] and Veterans Affairs [VA] loans.
“Purchase volume increased sharply for the week compared to both last week, which included the Veteran’s Day holiday, and last year, with purchase volume up more than 11 percent on a year-over-year basis,” Fratantoni adds. “The increase in purchase activity was driven by borrowers seeking larger loans, and that drove up the average loan amount on home purchase applications to $310,000, the highest in the survey, which dates back to 1990.”
About 58.2% of total applications were for refinances – down from 61.9% the previous week.
Rates increased for a third straight week. The average rate for a 30-year, fixed-rate mortgage (FRM) was 4.16%, up from 3.95% the previous week.
The average rate for a jumbo 30-year FRM was 4.04%, up from 3.89%.
The average rate for a 30-year FRM backed by the FHA was 3.90%, up from 3.73%.
The average rate for a 15-year FRM was 3.35%, up from 3.15%.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.24%, up from 3.11%.
The ARM share of activity increased to 5.2% of total applications.
Applications for mortgages backed by the FHA represented about 11.7% of all applications – down from 12.2% the week prior. The VA share of total applications was 12.5%, down slightly from 12.6%. The U.S. Department of Agriculture share was 0.8%, up from 0.6%.