After the first uptick in several weeks, mortgage application activity again gained momentum, with purchases and refinances both increasing.
The Mortgage Bankers Association’s weekly Market Composite Index climbed up a seasonally adjusted 1.7% for the seven-day period ending Nov. 15. The trade group’s index was up for a second consecutive week, following an 0.5% rise. Year-over-year, application volume jumped 11.4%, even as the 30-year conforming rate came in at its highest since July.
“Even with the uptick in rates, overall mortgage applications increased,” said Joel Kan, MBA’s vice president and deputy chief economist, in a press release.
The 30-year conforming rate averaged 6.9% compared to 6.86% a week earlier. Points used to buy down the rate increased to 0.7 from 0.6.
The average contract rate of the 30-year fixed jumbo mortgage moved 3 basis points higher to 7.03% compared to 7% in the prior weekly survey. Meanwhile, the 30-year Federal Housing Administration-backed mortgage rate took a turn in the opposite direction, decreasing to 6.68% from 6.69%, which contributed to the week’s elevated activity, MBA said.
The seasonally adjusted Purchase Index saw a 2% seasonally adjusted rise. The Refinance Index also increased similarly by 1.8%.
“The pickup in purchase applications was driven by conventional and FHA loans,” Kan noted. “For-sale inventory has loosened in some markets and some potential buyers have been able to take advantage of increasing supply and lower FHA rates.”
Refinance activity ended up higher as well, largely thanks to borrowers of loans guaranteed by the Department of Veterans Affairs, the MBA found. VA-backed applications accelerated 10.3% week over week.
Refinance also nabbed a greater 41% share of mortgage activity compared to 39.9% seven days earlier. The share of adjustable-rate mortgages slipped down to 5.9% relative to total volume after accounting for 6.5% the prior week.
The seasonally adjusted Government Index also rose 3.8% on a weekly basis and finished 26.9% higher year over year. FHA-backed activity accounted for 16.6%, up from 16% seven days earlier, while VA-guaranteed loans made up 13.6% compared to 13.3%. The small slice of loans sponsored by the U.S. Department of Agriculture equaled 0.4%, contracting from 0.5% seven days earlier.
