Mortgage application volume saw a rise for the first time in seven weeks, despite an increase in the 30-year fixed rate for conforming loan balances, as reported by the Mortgage Bankers Association on Wednesday. The market composite index, which indicates loan application volume, experienced a modest increase of 0.5% for the week ending November 8, on a seasonally adjusted basis, following a significant 11% decline the previous week.
When not adjusted, the index showed a 2% decrease compared to the week prior. "Mortgage rates continued to increase last week, driven by higher Treasury yields as financial markets absorbed the potential impacts of a Trump presidency," commented Joel Kan, the association's deputy chief economist. "However, despite rising rates, applications increased for the first time in seven weeks." In last week’s presidential election, Trump secured victory against Kamala Harris.
The seasonally adjusted purchase index observed a 2% growth from the previous week, largely attributed to gains in Federal Housing Administration (FHA) and Veteran Affairs applications. Kan noted, "Conventional purchase applications were also up slightly." Without adjustments, the purchase index recorded a 2% decrease week over week but increased by 1% on an annual basis.
The average interest rate for 30-year fixed-rate mortgages with conforming loan balances of $766,550 or less surged to 6.86%, marking its highest level since July, up from 6.81% a week earlier. For loans exceeding that amount, the rate rose to 7% from 6.98%. Rates for 15-year loans remained steady at 6.21%. The fixed-rate mortgages with 30-year terms backed by FHA fell to 6.69%, down from 6.75% on a weekly basis.
The share of FHA loans, known for their appeal to first-time home buyers due to lower down payment requirements, increased to 16% of total applications, up from 15.5% the previous week. The refinance index saw a decline of 2% weekly. Kan reported, "The upward trend in rates led to refinance activity dropping to its lowest level since May." Nonetheless, on an annual basis, the refinance index experienced a remarkable 43% increase..