Browse
Log in / Register
Share
Mortgage application volume fell by 5.2% for the week ending November 14, a direct response to rising interest rates. According to the Mortgage Bankers Association (MBA), the average contract rate for a 30-year fixed-rate mortgage increased to 6.37%, its highest level in four weeks. This uptick caused both home purchase and refinance activity to decline, signaling renewed buyer hesitation in the face of higher borrowing costs. The data underscores the market's continued sensitivity to even minor rate fluctuations.
The Market Composite Index, a measure of mortgage loan application volume, decreased 5.2% on a seasonally adjusted basis from the previous week. The decline was more pronounced on an unadjusted basis, falling 7%. This drop reverses a 6% increase registered the prior week. The Refinance Index decreased by 7% and was 125% higher than the same week one year ago. The seasonally adjusted Purchase Index, which tracks applications for home buying, decreased 2% from one week earlier, showing that potential homebuyers are pulling back.
The increase in rates was not uniform across all loan products. While the key 30-year conforming loan rate rose, other rates saw mixed movements:
An Adjustable-Rate Mortgage (ARM) is a home loan with an interest rate that can change periodically based on market indexes. The "5/1" means the initial rate is fixed for five years, after which it adjusts annually. The share of ARM applications decreased to 7.5% of total activity, contributing to a dip in the overall average loan size.
Mortgage rates are influenced by broader economic factors. The 30-year mortgage rate is typically tied to the yield of the 10-year U.S. Treasury note. When investors' expectations for economic growth and inflation change, it causes the yield on these government bonds to move, and mortgage rates tend to follow. The recent upward trend suggests shifting economic forecasts.
The following table summarizes the key rate changes from the MBA's weekly survey:
| Loan Type | Average Contract Interest Rate (Previous Week) | Average Contract Interest Rate (Week of Nov. 14) | Points (Incl. Origination Fee) |
|---|---|---|---|
| 30-Yr Fixed (Conforming) | 6.34% | 6.37% | 0.62 (unchanged) |
| 30-Yr Fixed (Jumbo) | 6.46% | 6.39% | Increased to 0.42 from 0.38 |
| 30-Yr Fixed (FHA) | 6.14% | 6.14% | Increased to 0.84 from 0.76 |
| 15-Yr Fixed | 5.70% | 5.83% | Increased to 0.69 from 0.64 |
| 5/1 ARM | 5.50% | 5.65% | Decreased to 0.81 from 0.85 |
Based on our experience assessment, the current environment requires careful planning. Joel Kan, MBA’s Vice President and Deputy Chief Economist, noted that "potential homebuyers [are] moving to the sidelines again," although there was a small increase in FHA purchase applications. For homeowners considering a refinance, the window of opportunity may be narrowing as rates trend upward.
For prospective buyers, getting pre-approved and understanding your budget is more critical than ever. Even small rate increases can significantly impact your monthly payment. For those considering an ARM, weigh the lower initial payment against the future risk of rising rates. The recent decline in ARM share suggests borrowers are becoming more cautious.
The key takeaway is that mortgage markets are dynamic. While the weekly dip in applications points to cooling demand, the year-over-year increases in both purchase and refinance activity indicate a market that is still significantly more active than in 2023. Monitoring weekly rate trends and consulting with lenders can help you make informed decisions.
