Due mainly to mortgage rates hitting yet another all-time low, mortgage application volume jumped 3.9% during the week ended Nov. 20, with applications for refinances increasing 5% and applications for purchases increasing 4%, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
On an unadjusted basis, total volume increased 3% compared with the previous week.
Year-over-year, applications for refinances were up 79% while applications for purchases were up 19%.
Joel Kan, associate vice president of industry and economic forecasting for the MBA, points out that the average rate for a 30-year fixed-rate mortgage dropped seven basis points to 2.92%, “another record low in MBA’s survey.”
“Weekly mortgage rate volatility has emerged again, as markets respond to fiscal policy uncertainty and a resurgence in COVID-19 cases around the country,” Kan says. “The decline in rates ignited borrower interest, with applications for both home purchases and refinances increasing on a weekly and annual basis.
“The ongoing refinance wave has continued into November,” Kan says. “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.
“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,” Kan adds. “Furthermore, purchase activity has surpassed year-ago levels for over six months.”
The refinance share of mortgage activity increased to 71.1% of total applications, up from 69.8% the previous week.
The adjustable-rate mortgage (ARM) share of activity remained unchanged at 1.9% of total applications.