Applications for purchase loans rose 12% from the previous week and 52% from a year earlier, according to a weekly survey of lenders conducted by the Mortgage Bankers Association.
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A slight drop in mortgage rates led to a surge in loan applications from prospective homebuyers, but little interest in refinancing, according to the Mortgage Bankers Association’s weekly lender survey.
According to MBA’s Weekly Mortgage Application Survey, purchase loan applications rose a seasonally adjusted 12% from the previous week and 52% from a year ago last week.
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Refinance applications fell 3% from the previous week, according to the survey, but rose 119% from a year earlier, when mortgage rates were still near post-pandemic highs.
Joel Kang
“Purchasing activity increased last week as traditional purchase offers picked up the pace, mortgage rates fell for the first time in more than two months, and the 30-year fixed rate fell slightly to 6.86%,” said Joel Kang, MBA deputy chief economist. This resulted in an increase in overall applications.” said in a statement. “Increasing inventory for sale and signs that the economy remains strong are keeping buyers in the market despite recent interest rate increases.”
According to MBA research, 30-year fixed rate conforming mortgage rates averaged 6.86% last week, down from 6.90% the previous week.
The 30-year fixed rate conforming mortgage rate has risen toward 7% since hitting a 2024 low of 6.03% on Sept. 17, according to Rate Lock data tracked by Optimal Blue on Tuesday. The average is 6.74%.
Mortgage interest rates recover
This is well below the 2024 high of 7.27% recorded on April 25th and the post-pandemic high of 7.83% recorded in October 2023.
But Fannie Mae economists said in their latest housing forecast that strong consumer spending and rising inflation indicators, a sign of strength in the economy, have led bond market investors to seek higher yields on government bonds and mortgage-backed securities. He said that
Many economists still think mortgage rates have peaked, but it remains to be seen whether the tariffs, tax cuts, mass deportations and other policies pursued by the incoming Trump administration will cause inflation.
Economists at Fannie Mae and MBA said in their latest forecast that they expect interest rates to decline gradually over the next two years.
A gradual decline in interest rates is expected
Source: Fannie Mae and Mortgage Bankers Association November 2024 forecast.
Fannie Mae economists in October predicted that 30-year fixed-rate mortgage rates would fall to 6% by the end of this year and 5.6% by the end of next year.
Economists in Fannie Mae’s Economic and Strategic Research (ESR) group predicted on Nov. 13 that mortgage rates would be near 7% by the end of this year and remain above 6% in 2025 and 2026. I expected it.
Economists at the Mortgage Bankers Association (MBA) are charting a similar path for interest rates in the coming years, with rates on 30-year fixed-rate mortgages still at 6.4% at the end of next year and averaging 6.3% in 2026. I expect it to be. .
Lawrence Yun, an economist at the National Association of Realtors, predicted on Nov. 8 that mortgage rates could rise next year if policies implemented by the incoming Trump administration spur home construction and bring more people back into the workforce. He said there is a possibility of a decline.
Yun expects existing home sales to rise 9% next year and 13% in 2026 if mortgage rates stay near 6% and employers add 2 million jobs a year. There is.
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