Mortgage applications fall over Thanksgiving week as rates rise 2021: Massachusetts Homeowners Homebuyers

Mortgage applications fell 7.2 percent on a week-over-week, seasonally adjusted basis in the week ended November 26, 2021, while the average 30-year fixed-mortgage rate rose for the third week in a row to 3.31 percent, its highest level since April, the Mortgage Bankers Association said, citing its Market Composite Index.

The average contract interest rate for a 15-year fixed-rate mortgage climbed to 2.63 percent from 2.59 percent, while the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances of more than $548,250 decreased to 3.27 percent from 3.28 percent. The average contract interest rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration increased to 3.42 percent from 3.27 percent.

On an unadjusted basis, the market composite index, which measures mortgage-loan application volume, rose 4 percent. The refinance index, meanwhile, slid 15 percent from the previous week and was down 41 percent from the same week a year ago. The refinance share of mortgage activity decreased to 59.4 percent of total applications from 63.1 percent the previous week.

“Despite higher mortgage rates, purchase applications had a strong week, mostly driven by a 6 percent increase in conventional loan applications,” MBA associate vice president of economic and industry forecasting Joel Kan said in a press release. “Conventional loans tend to be larger than government loans, and this was evident in the average loan amount, which increased to $414,700 — the highest since February 2021. As home-price appreciation continues at a double-digit pace, buyers of newer, pricier homes continue to dominate purchase activity, while the share of first-time buyer activity remains depressed.”

The adjustable-rate mortgage share of activity rose to 3.6 percent of total applications. The FHA share of total applications increased to to 8.9 percent from 8.6 percent in the preceding week, while the VA share of applications declined to 10 percent from 10.3 percent. The USDA share of applications rose to 0.5 percent from 0.4 percent the previous week. The seasonally adjusted purchase index rose 5 percent from the previous week, while the unadjusted purchase index fell 30 percent on a weekly basis and 8 percent on an annual basis.

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