Mortgage Demand Rises to September Peak
- Mortgage application volume decreased slightly last week, driven by a rise in interest rates, though demand remains substantially higher than the same period in 2022.
- According to the Mortgage Bankers Association (MBA), the Market Composite Index, a measure of total mortgage application volume, decreased 2.3% on a seasonally adjusted basis during the week...
- "Inventory levels have increased in markets where sales price growth has slowed," noted Joel Kan, MBA's Vice President and Associate Staff economist, in a press release.
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Mortgage Applications Dip amid Rising Rates, But Remain Above Year-Ago Levels
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Key Takeaways
Mortgage application volume decreased slightly last week, driven by a rise in interest rates, though demand remains substantially higher than the same period in 2022. Refinance activity experienced a more pronounced drop, while purchase applications showed resilience despite the changing rate environment. The market is now closely watching for potential shifts following the possible resolution of the government shutdown.
Purchase and Refinance Trends Diverge
According to the Mortgage Bankers Association (MBA), the Market Composite Index, a measure of total mortgage application volume, decreased 2.3% on a seasonally adjusted basis during the week ending November 10, 2023 MBA Weekly Mortgage Applications Survey. However,the unadjusted Purchase Index,which measures applications for home purchases,showed strength,marking the strongest start to November since 2022.
“Inventory levels have increased in markets where sales price growth has slowed,” noted Joel Kan, MBA’s Vice President and Associate Staff economist, in a press release. “Based on the unadjusted purchase index for the week, this was the strongest start to November as 2022.”
demand for refinancing fell 3% for the week,but remained 147% higher than the same week in 2022,largely due to the previous decline in mortgage rates. The average loan size for refinances also dropped to its lowest level in over a month.
“Higher mortgage rates did quell some refinance activity, as conventional and VA refinance applications declined over the week, and the average loan size for refinances dropped to its lowest level in over a month,” Kan added.
Interest Rate Impact and Market Outlook
Mortgage rates have remained relatively stable so far this week, partially due to the Veterans Day closure of the bond market.The market is now focused on the potential resolution of the government shutdown and its potential impact on interest rates. A resolution could lead to increased volatility in the bond market and, consequently, mortgage rates.
Hear’s a look at recent mortgage rate trends (data as of November 15, 2023):
| Mortgage Type | Current Rate | Previous Week |
|---|---|---|
| 30-Year Fixed | 7.09% | 7.08% |
| 15-Year Fixed | 6.36% | 6.33% |
| Adjustable-Rate Mortgage (ARM) | 7.73% | 7.68% |