For the first time in seven weeks, mortgage demand rose as applications were up 0.5% during the week ending Nov. 8, the Mortgage Bankers Association (MBA) reported Wednesday.
Purchase loan demand drove the slight increase in the MBA’s Market Composite Index, which measures loan application volumes. The purchase index rose 2% from the prior week on a seasonally adjusted basis. Refinances, however, were down 2% as mortgage rates continue to climb close to 7%, according to HousingWire‘s Mortgage Rates Center.
On a year-over-year basis, the purchase index was up 1% and the refi index was up 43%.
“Mortgage rates continued to increase last week, driven by higher Treasury yields as financial markets digested the likely impacts of a Trump presidency,“ Joel Kan, the MBA’s deputy chief economist, said in a statement. “The Federal Reserve’s 25-basis-point rate cut was already anticipated and did little to move the markets.
“The 30-year fixed rate was at 6.86 percent last week, its highest since July 2024. However, despite the increase in rates, applications increased for the first time in seven weeks.”
The refinance share of mortgage applications remained unchanged during the week at 39.9%, while adjustable-rate mortgages (ARMs) saw their share decrease to 6.5%.
Government lending activity was another bright spot in the report as applications for Federal Housing Administration (FHA) loans increased their share to 16%, up from 15.5% a week ago, while applications for U.S. Department of Veterans Affairs (VA) loans grew their share from 12.5% to 13.3% during the week.
“Purchase applications picked up and remained close to levels from a year ago,“ Kan said. “FHA and VA purchase applications drove the stronger overall purchase activity, increasing 3 percent and 9 percent, respectively. FHA mortgage rates bucked the overall trend and were lower over the week, which likely helped some borrowers. Conventional purchase applications were also up slightly. Meanwhile, the upward climb in rates led to refinance activity falling to its lowest level since May 2024.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $766,550 or less shed 5 basis points to finish the week at 6.81%. Rates for 30-year jumbo loans (balances above $766,550) increased by 2 bps to 7%.
FHA loan applications also saw declining interest rates during the week, falling by 6 bps to 6.69%. Rates for 5/1 ARMs grew by 1 bps to an average of 6.06%, while those for 15-year fixed loans were unchanged at 6.21%
The MBA’s weekly mortgage applications survey is benchmarked at 100 in March 1990. It covers all closed-end residential mortgage applications originated through the retail and consumer direct channels.
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