Purchase activity reaches its highest level since January
Mortgage application activity showed signs of life during Thanksgiving week.
The Mortgage Bankers Association (MBA) reported a 2.8% increase in its Market Composite Index, a measure of loan application volume, for the week ending November 29. The figures were seasonally adjusted to account for the holiday's impact.
On a seasonally adjusted basis, the purchase index rose 6% compared to the previous week, reaching its highest level since January 2024. This uptick contrasted with the unadjusted data, which reflected a 30% decline from the previous week due to the shortened workweek. The year-over-year purchase index showed a 21% decline.
“Mortgage rates fell to their lowest level in over a month last week,” noted Joel Kan, vice president and deputy chief economist of MBA.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) dropped to 6.69%, down from 6.86% the previous week.
Despite this dip, refinance application activity saw a 1% decrease from the previous week and remained 7% lower than the same period in 2023. The refinance share of mortgage activity fell marginally to 38.7% of total applications, down from 38.8% the prior week.
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“The recent strength in purchase activity continues, supported by lower rates and higher inventory levels, which are giving prospective buyers more options compared to earlier in the year,” Kan added. “The purchase index increased for the fourth straight week to its highest level since January 2024. Conventional refinance applications declined despite the lower rates, but FHA and VA refinances rebounded from a week ago.”
Adjustable-rate mortgage (ARM) applications accounted for 6% of total activity. The FHA share of applications remained unchanged at 16.0%, while the VA share increased to 13.6% from 12.4%. The USDA share dipped slightly to 0.4% from 0.5%, according to the report.
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