For the second week in a row total mortgage demand rose more than 2.0%, according to the latest weekly survey from the Mortgage Bankers Association.
- Purchase demand was up 3% for the week but is still down 41% compared to the same week one year ago.
- Refi demand was up 2% for the week but is still down 86% compared to the same week one year ago.
Breaking It Down. The refinance share of mortgage activity increased by almost a full point to 28.4% of total applications and the adjustable-rate mortgage (ARM) share of activity decreased to 8.8% of total applications.
Mortgage Rates. The survey has the 30-year fixed at 6.67% for the week ending November 18th. This is a 23 basis point decrease from the prior week and puts the 30-year fixed down 47 basis points in just two weeks.
- The 15-year fixed fell to 6.08% and the 5/1 ARM increased to 5.78%.
Analysis. Joel Kan, MBA economist, said the drop in rates will help with purchasing power. “The decrease in mortgage rates should improve the purchasing power of prospective homebuyers, who have been largely sidelined as mortgage rates have more than doubled in the past year. As a result of the drop in mortgage rates, both purchase and refinance applications picked up slightly last week. However, refinance activity is still more than 80 percent below last year’s pace.”