Mortgage applications increased 3.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 20, 2020.
… The Refinance Index increased 5 percent from the previous week and was 79 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 19 percent higher than the same week one year ago.
“30-year fixed mortgage rates dropped seven basis points to 2.92 percent, another record low in MBA’s survey. Weekly mortgage rate volatility has emerged again, as markets respond to fiscal policy uncertainty and a resurgence in COVID-19 cases around the country. The decline in rates ignited borrower interest, with applications for both home purchases and refinancing increasing on a weekly and annual basis,” said Joel Kan, MBA’s Associate Vice President of Industry and Economic Forecasting. “The ongoing refinance wave has continued into November. Both the refinance index and the share of refinance applications were at their highest levels since April, as another week of lower rates drew more convntional loan borrowers into the market.”
Added Kan, “Amidst strong competition for a limited supply of homes for sale, as well as rapidly increasing home prices, purchase applications increased for both conventional and government borrowers. Furthermore, purchase activity has surpassed year-ago levels for over six months.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to a survey low of 2.92 percent from 2.99 percent, with points decreasing to 0.35 from 0.37 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The first graph shows the refinance index since 1990.
The refinance index has been very volatile recently depending on rates and liquidity.
But with record low rates, the index remains up significantly from last year.
According to the MBA, purchase activity is up 19% year-over-year unadjusted.
Note: Red is a four-week average (blue is weekly).