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Mortgage Apps on the Rise as Rates Level Off

Freddie Mac has reported in its latest Primary Mortgage Market Survey (PMMS), that the 30-year fixed-rate mortgage (FRM) averaged 3.10%, for the week ending November 24, 2021, unchanged from last week. Year-over-year, the 30-year FRM averaged 2.72%.

“Despite the noise around the economy, inflation, and monetary policy, mortgage rate volatility has been low,” said Sam Khater, Freddie Mac’s Chief Economist. “For most of 2021, mortgage rates have stayed within half a percentage point, which is a smaller range than in past years.”

While rates remained the same, the Mortgage Bankers Association (MBA) has found that mortgage application volume increased 1.8% from one week earlier, according to its Weekly Mortgage Applications Survey for the week ending November 19, 2021.

The MBA’s Refinance Index increased 0.4% from the previous week and was 34% lower than the same week one year ago. The seasonally adjusted Purchase Index increased 5% from one week earlier. The unadjusted Purchase Index decreased 0.4% compared with the previous week and was 4% lower than the same week one year ago.

The refinance share of mortgage activity increased to 63.1% of total applications from 62.9% the previous week. The ARM share of activity increased to 3.4% of total applications.

"Purchase activity increased for the third straight week, as housing demand remains robust, even as the housing market approaches the typically slower holiday season,” said Joel Kan, MBA's Associate VP of Economic and Industry Forecasting. “Both conventional and government loan applications increased, and the average loan size for a purchase loan was at $407,200, continuing its ongoing 2021 run of being mostly above $400,000."

By loan type, the FHA share of total applications decreased to 8.6% from 8.9% the week prior. The VA share of total applications decreased to 10.3% from 10.8% the week prior. The USDA share of total applications decreased to 0.4% from 0.5% the week prior.

Zillow’s latest Home Value Index (ZHVI) found that home value appreciation slowed in October 2021 for the third consecutive month, perhaps a sign that the market is cooling as we near the end of 2021.

"Home buyers shopping this fall shouldn't expect the same frenzied demand that triggered bidding wars on listings this spring and summer," said Zillow Senior Economist Jeff Tucker. "The normal seasonal slowdown of autumn has returned, when many families are busy with back-to-school activities and planning for the holidays. Buyers can expect less competition, meaning more time to decide on a house and the potential for prices to fall on listings they've saved on Zillow."

Also this week, Freddie Mac reported the 15-year FRM averaging 2.42%, with an average 0.7 point, up from last week when it averaged 2.39%. A year ago at this time, the 15-year FRM averaged 2.28%. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.47% with an average 0.3 point, down from last week when it averaged 2.49%. A year ago at this time, the five-year ARM averaged 3.16%.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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