Home purchase application activity continues to fluctuate with an increase this past week but mortgage watchers say the bigger picture shows applications overall running ahead of a year ago as market conditions continue to mark gradual improvement.
According to the latest Mortgage Bankers Association (MBA) report, the Market Composite Index—the measure of mortgage loan activity volume—increased 4.8% from one week earlier on a seasonally adjusted basis for the week ending Dec. 5, following last week’s 1.4% decrease for the week ending Nov. 28. On an unadjusted basis, the Index decreased 49% compared with the previous week. Last week’s results include an adjustment for the Thanksgiving holiday.
“Compared to the prior week’s data, which included an adjustment for the Thanksgiving holiday, mortgage application activity increased last week, driven by an uptick in refinance applications,” said Joel Kan, MBA’s vice president and deputy chief economist. “Conventional refinance applications were up almost 8 percent and government refinances were up 24 percent as the FHA rate dipped to its lowest level since September 2024. Conventional purchase applications were down for the week, but there was a 5 percent increase in FHA purchase applications as prospective homebuyers continue to seek lower down payment loans. Overall purchase applications continued to run ahead of 2024’s pace as broader housing inventory and affordability conditions improve gradually.”
According to MBA, the seasonally adjusted Purchase Index decreased 2% from one week earlier. The unadjusted Purchase Index increased 32% compared with the previous week and was 19% higher than the same week one year ago.
This week, the Refinance Index increased 14% from the previous week and was 88% higher than the same week one year ago, MBA reported.
The refinance share of mortgage activity increased to 58.2% of total applications from 53.0% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.0% of total applications.
Most of the government-backed loans also showed increases this week, including the FHA share of total applications, which increased to 20.2% from 18.3% the week prior. The VA share of total applications increased to 16.4% from 15.0% the week prior and the USDA share of total applications remained unchanged at 0.3 percent from the week prior.
For additional data from this week’s report, click here.
