Applications fell 1.4 percent for the week ending Nov. 28, according to the Mortgage Bankers Association. That’s down from the week before when it saw applications rise 0.2%. Totals are also adjusted for the Thanksgiving holiday.
The market composite index, a measure of mortgage loan application volume, fell 1.4 percent on a seasonally adjusted basis from a week earlier. On an unannounced basis, the index has fallen by 33 percent compared to the previous week.
The refinance index was down 4% from last week but was up 109% from the same week a year ago. The seasonally adjusted purchasing index rose 3% from a week earlier. The unannounced purchases index fell 32 percent from the previous week and was 17 percent higher than the same week a year ago.
The drop in new home loan applications and refinancing comes as the mortgage interest rate for a 30-year fixed home loan fell to 6.23 percent for the week ending Nov. 26, according to Freddie Mac.
The Federal Housing Administration’s (FHA) share of total applications fell to 18.3 percent from 18.8 percent the week before. The share of total applications for Veterans Affairs loans fell to 15.4 percent from 15.4 percent the week before. USDA’s share of total applications fell to 0.3% from 0.4% the week before.
“Mortgage rates edged lower in line with Treasury yields, which belied data that pointed to a weak labor market and declining consumer confidence. The 30-year fixed mortgage rate rose steadily over the past month to 6.32 percent.” Joel’sN, MBA Vice President and Deputy Chief Economist.
“After adjusting for the effects of the Thanksgiving holiday, refinance activity in both conventional and government loans declined, as borrowers held on to lower rates.”
Contract rate
The average contract interest rate for 30-year fixed-rate mortgages with a loan balance (6,806,500 or less) decreased from 6.40 percent to 6.32 percent, with points falling from 0.58 for 80% loan-to-value ratio (LTV) loans (which includes origination fees). The effective rate decreased from last week.
The average contract rate for 30-year fixed-rate mortgages with jumbo loan balances (over $6,806,500) decreased from 6.49 percent to 0.45 (which includes origination fees) for 80% LTV loans to 0.40. The effective rate decreased from last week.
The average contract interest rate for FHA-backed 30-year fixed-rate mortgages fell to 6.12 percent from 6.15 percent, down from 0.79 (including origination fees) to 0.73 for 80% LTV loans. The effective rate decreased from last week.
The average contract rate for 15-year fixed-rate mortgages fell from 5.80 percent to 5.73 percent, with points falling from 0.72 (including origination fees) to 0.64 for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for the 5/1 arm fell to 5.40% from 5.44% a week ago, with points falling from 0.54 (including origination fees) to 0.23 for 80% LTV loans. The effective rate decreased from last week.
“Purchase requests rose slightly, but we continue to see mixed results each week as the broader economic outlook remains cloudy, even as cooling home price growth and increased for-sale inventory bring some buyers back into the market.”
According to Realtor.com® data, the national median list price for October is 4,424,200. Active listings increased 15.3% year over year, marking the 24th straight month of gains.
Calculated mortgage rates
Mortgage rates are determined by various factors in the economy, and the length of your loan will also determine the mortgage rate you qualify for.
According to Fannie Mae, the 30-year mortgage rate is tied to the yield on the 10-year Treasury note. As the yield on the 10-year Treasury note moves, so do mortgage rates.
The yield on the 10-year Treasury note is determined by expectations of low-term interest rates in the economy over the term of the bond, plus a term premium.