A decrease in FHA rates led to a jump in refinance applications
The volume of mortgage loan applications rose as the 30-year fixed mortgage rate remained under 4% for the fourth consecutive week, according to the Mortgage Bankers Association.
MBA’s Market Composite Index jumped 3.8% on a seasonally adjusted basis and 47% on an unadjusted basis from last week.
Refinance applications grew 9% week over week and were 146% higher than the same week a year ago. Seasonally adjusted purchase applications, on the other hand, went down 0.4% week over week but climbed 35% on an unadjusted basis.
Despite the slight decline, purchase applications stayed in line with the gradual growth trend in the purchase market, according to Joel Kan, associate vice president of economic and industry forecasting at MBA.
"Low mortgage rates continue to be the trend as 2019 comes to an end, and mortgage applications responded accordingly last week, rising 3.8%," Kan said. "The November jobs data showed increased payroll gains and low unemployment, which means conditions remain favorable for steady purchase growth in the coming months."
Share of mortgage application activity:
- The refinance share of mortgage activity increased to 62.4% of total applications from 59% week over week
- The adjustable-rate mortgage (ARM) share of activity increased to 5% of total applications
- The FHA share of total applications climbed to 13.9% from 12% the week before
- The VA share of total applications slipped to 12.4% from 12.7% the week before
- The USDA share of total applications stayed unchanged from 0.5% the week before
