Refinance applications jump to highest level since April on low mortgage rates

After two weeks of decreasing numbers, mortgage applications increased 3.9% last week, according to a report from the Mortgage Bankers Association. Refinance applications climbed even higher.

The refinance index jumped up 5% from the previous week and is now up 79% over last year’s totals from the same week. The seasonally adjusted purchase index increased 4% from one week earlier, while the unadjusted purchase index decreased 2% compared with the previous week.

Joel Kan, MBA’s associate vice president of industry and economic forecasting, noted volatility in the weekly mortgage rates due to markets responding to “fiscal policy uncertainty” and a resurgence in COVID-19 cases around the country.

“The ongoing refinance wave has continued into November, and both the refinance index and the share of refinance applications were at their highest levels since April, as another week of lower rates drew more conventional loan borrowers into the market,” Kan said. “Amidst strong competition for a limited supply of homes for sale, as well as rapidly increasing home prices, purchase applications increased for both conventional and government borrowers. Furthermore, purchase activity has surpassed year-ago levels for over six months.” 

The refinance share of mortgage activity reportedly increased to 71.1% of total applications, up from 69.8% the previous week.

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

• The USDA share of total applications decreased to 0.4% from 0.5% the week prior
• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to a survey-low of 2.92% from 2.99%
• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.18% from 3.11%
• The average contract interest rate for 30-year fixed-rate mortgages decreased to a survey-low 2.99% from 3.11%
• The average contract interest rate for 15-year fixed-rate mortgages decreased to a survey-low 2.51% from 2.59%
• The average contract interest rate for 5/1 ARMs decreased to 44% from 2.63%

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