The Mortgage Bankers Association reported that applications dropped 0.6% during the week ending Nov. 27 in its latest weekly survey.

The refinance index decreased as well, down 5% from the previous week but up 102% over last year’s totals from the same week. The seasonally adjusted purchase index did increase – up 9% from one week earlier – while the unadjusted purchase index decreased 28% compared with the previous week.

Joel Kan, MBA’s associate vice president of industry and economic forecasting, noted that numbers for this report were always going to be “mixed” following the Thanksgiving holiday.

“Purchase activities continued to show impressive year-over-year gains, with both the conventional and government segments of the market posting another week of growth,” Kan said. “Purchase loan amounts continue to be significantly higher than their average over the past decade and hit $375,000 last week, the largest since the inception of MBA’s survey in 1990. Housing demand remains strong, and despite extremely tight inventory and rising prices, home sales are running at their strongest pace in over a decade.” 

Kan added that a sustained period of low mortgage rates continues to “spark borrower demand,” leading to the mortgage industry being poised for its strongest year in originations since 2003.

“The ongoing refinance wave has been beneficial to homeowners looking to lower their monthly payments during these challenging economic times brought forth by the pandemic,” he said. 

The refinance share of mortgage activity decreased to 69.5% of total applications from 71.1% the previous week. The adjustable-rate mortgage share of activity decreased to 1.8%, from 1.9% last week.

Here is a more detailed breakdown of this week’s mortgage application data:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) remained unchanged at 2.9% from the previous week
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.19% from 3.18%
  • The average contract interest rate for 30-year fixed-rate mortgages increased to 3% from 2.99% – a survey-low, as reported last week
  • The average contract interest rate for 15-year fixed-rate mortgages decreased to a survey-low 2.53% from 2.51%
  • The average contract interest rate for 5/1 ARMs increased to 47% from 2.63%

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