Home purchase application activity fluctuated over the Thanksgiving holiday period, both increasing and decreasing over the past few weeks. This week mortgage activity saw a slight decline.
According to the latest Mortgage Bankers Association (MBA) report, the Market Composite Index—the measure of mortgage loan activity volume—decreased 1.4% from one week earlier on a seasonally adjusted basis for the week ending Nov. 28, following last week’s 0.2% increase for the week ending Nov. 21. On an unadjusted basis, the Index decreased 33% compared with the previous week. The previous week ending Nov. 14 saw application activity decrease 5.2%. This week’s results include an adjustment for the Thanksgiving holiday.
“Despite the 30-year fixed-rate mortgage declining for the first time since the end of October, mortgage applications decreased during Thanksgiving week, led by a 4 percent decline in refinances,” said MBA President and CEO Bob Broeksmit. “Purchase applications were up slightly, but demand overall remains modest in light of ongoing affordability challenges and economic uncertainty.”
“Mortgage rates moved lower in line with Treasury yields, which declined on data showing a weaker labor market and declining consumer confidence,” said Joel Kan, MBA’s vice president and deputy chief economist. “The 30-year fixed mortgage rate declined to 6.32 percent after steadily increasing over the past month.”
According to MBA, the Refinance Index decreased 4% from the previous week but was a notable 109% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 3% from one week earlier. The unadjusted Purchase Index decreased 32% compared with the previous week and was 17% higher than the same week one year ago.
The refinance share of mortgage activity decreased to 53.0% of total applications from 53.4% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.0 percent of total applications.
While the overall volume of refinance mortgage applications is much higher than a year ago at this time, the current percentage of them vs overall application activity decreased due to the ongoing elevated rate environment, Kan noted.
“After adjusting for the impact of the Thanksgiving holiday, refinance activity decreased across both conventional and government loans, as borrowers held out for lower rates,” he said. “Purchase applications were up slightly, but we continue to see mixed results each week as the broader economic outlook remains cloudy, even as cooling home-price growth and increasing for-sale inventory bring some buyers back into the market.”
All the government-backed loans also showed decreases this week, including the FHA share of total applications, which decreased to 18.3% from 18.8% the week prior; the VA share of total applications, which decreased to 15.0% from 15.4% the week prior; and the USDA share of total applications, which decreased to 0.3% from 0.4% the week prior.
For additional data from this week’s report, click here.
