Mortgage applications increased 1.8% for the week ending Nov. 19, despite higher rates, according to the Mortgage Bankers Association (MBA) survey published on Wednesday.
The increase was mainly driven by the purchase index growing by 4.7% from the previous week, on a seasonally adjusted basis. Concurrently, the refinance index grew by 0.4% from the week prior.
Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a statement that purchase activity increased for the third straight week, as housing demand remains robust, even as the housing market approaches the typically slower holiday season.
“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,” Kan said.
Regarding refi activity, Kan added that “borrowers continue to lock in mortgages in anticipation of higher rates in the future.”
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However, mortgage applications declined across the board in comparison to a year ago. The overall market composite index dipped 24.5% on a seasonally adjusted basis. Meanwhile, “refis” apps fell 33.6% year-over-year, and purchase apps decreased 6% in the same period, a symptom of even lower levels of inventory.
According to Khan, financial markets continue to discern the Federal Reserve’s policy in light of the current high growth, high inflation environment.
The trade group estimates the average contract 30-year fixed-rate mortgage for conforming loans ($548,250 or less) increased to 3.24%, four basis points higher than the previous week. For jumbo mortgage loans (greater than $548,250), it went to 3.28% from 3.26%.
Refi represented 63.1% of total applications, up from 62.9% the previous week. VA loans consisted of 10.3% of the share, decreasing five basis points. Meanwhile, FHA loans went from 8.9% to 8.6% in the period. The USDA share was at 0.4% of the total.
