Decline in rates not enough to bring back refinance activity.
Mortgage application volume dipped 0.8% over the Thanksgiving holiday, according to data from the Mortgage Bankers Association’s latest survey.
Overall mortgage applications in the US dropped 0.8% on a seasonally adjusted basis for the week ending November 25. When unadjusted, applications were down 33% week over week.
“Mortgage rates declined again last week, following bond yields lower. The 30-year fixed mortgage rate decreased to 6.49% and has now fallen 57 basis points over the past four weeks,” said Joel Kan, MBA vice president and deputy chief economist. “Additionally, mortgage rates for most other loan types declined. The economy here and abroad is weakening, which should lead to slower inflation and allow the Fed to slow the pace of rate hikes.”
MBA’s seasonally adjusted refinance index fell 13% from the previous week and was 86% lower than the same week one year ago. Meanwhile, the seasonally adjusted purchase index increased by 4% from the week before.
“Purchase activity increased slightly after adjusting for the Thanksgiving holiday, but the decline in rates was still not enough to bring back refinance activity,” Kan said. “Refinance applications fell another 13%, and the refinance share of applications was at 26%. Both measures were at their lowest levels since 2000.”
The refinance share of total mortgage applications declined from 28.4% to 26.1% week over week, while the adjustable-rate mortgage share of activity increased to 9% of total applications.