The latest tracking data suggests that mortgage activity has been picking up in spite of a recent jump in the average interest rate.
Total applications increased for most of the major mortgage programs during the week that ended Nov. 8, according to the Mortgage Bankers Association (MBA). On a seasonally adjusted basis, MBA’s composite index increased 9.6% in the weekly survey, while applications for home purchases jumped 5% during that time.
Home-purchase applications were up 15% on an unadjusted basis compared to the same week a year earlier. The unadjusted refinance index rose 13% from the previous week to its highest level in five weeks. MBA’s refinance index was up 188% compared to a year earlier, and refinances accounted for nearly 62% of all applications.
“Mortgage applications increased to their highest level in over a month, as both purchase and refinance activity rose despite another climb in mortgage rates,” said Joel Kan, MBA associate vice president of economic and industry forecasting.
The average rate for a 30-year mortgage with a conforming balance jumped five basis points to 4.03%, MBA reported. Points dipped slightly, but the effective rate rose.
Kan said positive data regarding consumer sentiment, as well as growing optimism surrounding the trade dispute between the U.S. and China, were likely behind last week’s rate hike.
“With rates still in the 4 percent range, we continue to expect to see moderate growth in refinance activity in the final weeks of 2020,” Kan said.