Mortgage applications were up 3.9% from a week earlier, as another week of record lows drew more borrowers into the market, according to the Mortgage Bankers Association.
"Weekly mortgage rate volatility has re-emerged as markets react to fiscal uncertainties and a rebound in COVID-19 cases across the country," said Joel Kan, the MBA's vice president of industrial and economic forecasting, in a press release. "The fall in interest rates has sparked interest among borrowers, and requests for both home purchases and refinances have increased weekly and annually."
The MBA's weekly mortgage application survey for the week ending November 20 found the refinancing index up 5% from the previous week and 79% higher than the same week a year ago. The refinancing share of mortgage activity rose from 69.8% in the previous week to 71.1% of total applications.
"The ongoing refinancing wave continued into November," said Kan. "Both the refinancing index and the proportion of refinancing requests were at their highest levels since April, as another week of lower interest rates brought more conventional borrowers onto the market."
The seasonally adjusted purchasing index rose by 4% compared to the week before, while the unadjusted purchasing index fell by 2% compared to the previous week and was 19% higher than in the same week a year ago.
"Amid stiff competition for a limited supply of homes for sale and rapidly rising real estate prices, purchase requests for both conventional and government borrowers increased. In addition, buying activity has exceeded last year's level for over six months," said Kan.
Variable rate mortgage activity remained unchanged at 1.9% of total applications, while the proportion of Federal Housing Administration insured loan applications decreased from 10.5% the previous week to 10%.
Veterans Affairs guaranteed loans fell from 12.1% to 11.8% and the US Department of Agriculture / Rural Development fell to 0.4% from 0.5% the week before.
The average contract rate for 30 year fixed rate mortgages with compliant loan balances ($ 510,400 or less) decreased 7 basis points to 2.92%, the lowest since the MBA began tracking this data.
The average contract rate for 30-year fixed rate mortgages backed by the FHA decreased 12 basis points to 2.99%.
For 15-year fixed rate mortgages, the average decreased by 8 points to 2.51%. The average contract rate for 5/1 ARM decreased from 2.84% to 2.63%.
However, this downward trend did not carry over to all product types. For 30 year fixed rate mortgages with jumbo loan balances (over $ 510,400), the average contract rate increased 7 basis points to 3.18%.