After increasing 5.5% the previous week (refinance apps down 3.0%, purchase apps up 19.0%), mortgage application volume plummeted 9.4% during the week ended Nov. 25, driven mainly by a huge drop in refinances stemming from higher mortgage rates, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.
The results include an adjustment for the Thanksgiving holiday.
Applications for refinances fell 16%, while applications for purchases decreased 0.2%.
On an unadjusted basis, total application volume decreased 38% compared with the previous week. Applications for purchases decreased 34% compared with the previous week and increased 3.0% compared with the same week one year earlier.
The dip in applications for refinances brought the refinance share of mortgage activity to 55.1%, down from 58.2% the previous week.
Interest rates continued to increase sharply last week. The average rate for a 30-year, fixed-rate mortgage (FRM) was 4.23%, up from 4.16%.
The average rate for a 30-year jumbo FRM was 4.18%, up from 4.04%.
The average rate for a 30-year FRM backed by the Federal Housing Administration (FHA) was 4.00%, up from 3.90% to reach the highest level since July 2015.
The average rate for a 15-year FRM was 3.48%, up from 3.35% to reach the highest level since October 2014.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.23%, down from 3.24%.
The ARM share of activity increased to 5.7% of total applications.
In addition, the MBA especially notes that the average loan size for purchase applications reached a survey high at $312,400.
Applications for loans backed by the FHA represented about 10.4% of all applications – down from 11.7% the week prior. The Veterans Affairs share of total applications was 11.7%, down from 12.5%. The U.S. Department of Agriculture share of total applications remained unchanged at 0.8%.