Homebuyer Demand for Mortgages Rises 12% After Interest Rates Drop
Key Highlights
Mortgage applications for home purchases jumped 12% from the previous week and were 52% higher than the same time last year.
The average 30-year fixed-rate mortgage rate dropped slightly, from 6.90% to 6.86%.
Refinancing applications fell 3% this week but remained 119% higher than the same week last year.
Mortgage Demand Picks Up as Rates Decline
A slight drop in mortgage rates sparked a significant surge in demand last week, with total mortgage activity increasing 6.3%, according to the Mortgage Bankers Association (MBA).
The average interest rate for a 30-year fixed mortgage with a loan balance of $766,550 or less dipped to 6.86%, with no change in loan origination fees for borrowers putting down 20%. While the rate drop wasn’t large, it was enough to encourage buyers who had been waiting on the sidelines due to higher rates, election uncertainty, or limited housing supply.
Home Purchase and Refinance Trends
Purchase Applications: Mortgage applications to buy a home increased 12% week-over-week, marking a 52% jump compared to the same period last year. Improved housing inventory and a strong economy kept buyers active despite recent rate hikes. The average loan size for home purchases rose to $439,200, the highest in nearly a month.
Refinancing Applications: Applications to refinance dropped 3% this week but were still up 119% year-over-year. However, this increase is partly skewed because of differences in Thanksgiving holiday timing compared to 2023.
What’s Next for Mortgage Rates?
Mortgage rates started this week slightly lower, but economic reports set to be released Wednesday could cause bigger shifts. Holiday weeks, especially Thanksgiving, tend to see unpredictable movement in bond markets, which impacts mortgage rates.
“Thanksgiving week often leads to unusual market conditions due to limited trading activity, which can result in random rate fluctuations,” noted Matthew Graham, COO of Mortgage News Daily.
Key Highlights
Mortgage applications for home purchases jumped 12% from the previous week and were 52% higher than the same time last year.
The average 30-year fixed-rate mortgage rate dropped slightly, from 6.90% to 6.86%.
Refinancing applications fell 3% this week but remained 119% higher than the same week last year.
Mortgage Demand Picks Up as Rates Decline
A slight drop in mortgage rates sparked a significant surge in demand last week, with total mortgage activity increasing 6.3%, according to the Mortgage Bankers Association (MBA).
The average interest rate for a 30-year fixed mortgage with a loan balance of $766,550 or less dipped to 6.86%, with no change in loan origination fees for borrowers putting down 20%. While the rate drop wasn’t large, it was enough to encourage buyers who had been waiting on the sidelines due to higher rates, election uncertainty, or limited housing supply.
Home Purchase and Refinance Trends
Purchase Applications: Mortgage applications to buy a home increased 12% week-over-week, marking a 52% jump compared to the same period last year. Improved housing inventory and a strong economy kept buyers active despite recent rate hikes. The average loan size for home purchases rose to $439,200, the highest in nearly a month.
Refinancing Applications: Applications to refinance dropped 3% this week but were still up 119% year-over-year. However, this increase is partly skewed because of differences in Thanksgiving holiday timing compared to 2023.
What’s Next for Mortgage Rates?
Mortgage rates started this week slightly lower, but economic reports set to be released Wednesday could cause bigger shifts. Holiday weeks, especially Thanksgiving, tend to see unpredictable movement in bond markets, which impacts mortgage rates.
“Thanksgiving week often leads to unusual market conditions due to limited trading activity, which can result in random rate fluctuations,” noted Matthew Graham, COO of Mortgage News Daily.