Mortgage Applications Today: New Home Loan Applications Edge Up 0.2% as Refinancing Drops

by Joy Dumandan

Mortgage applications slightly increased 0.2% for the week ending Nov. 21, according to the Mortgage Bankers Association. It's a tick up from a week ago, when new home loan demand decreased 5.2%.

Meanwhile, the refinance share of mortgage activity decreased to 53.4% of total applications from 55.4% the previous week. The adjustable-rate mortgage share of activity increased to 7.9% of total applications.

This comes as the average mortgage interest rate on a 30-year fixed home loan edged up to 6.26% for the week ending Nov. 20, according to Freddie Mac.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2% compared with the previous week.

The Refinance Index decreased 6% from the previous week and was 117% higher than the same week one year ago. The seasonally adjusted Purchase Index increased 8% from one week earlier. The unadjusted Purchase Index increased 2% compared with the previous week and was 20% higher than the same week one year ago.

The Federal Housing Administration share of total applications decreased to 18.8% from 19.9% the week prior. The Veterans Affairs share of total applications increased to 15.4% from 15.2% the prior week. The USDA share of total applications increased to 0.4% from 0.3% the prior week.

"Despite these slightly higher rates, purchase applications increased over the week and remained at a stronger pace than a year ago, with increases across conventional and government purchase applications. The government purchase index, which includes FHA, VA, and USDA applications, increased 9% and had the strongest week since 2023," said Joel Kan, MBA vice president and deputy chief economist.

"Despite slowing home-price growth and lower mortgage rates, affordability remains a challenge in many markets and government loan programs remain appealing to qualified buyers looking to purchase a home. The average purchase loan size decreased to its lowest level in two months."

Mortgage applications slightly increased 0.2% for the week ending Nov. 21. (Getty Images)

Contract rates

The average contract interest rate for 30-year fixed mortgages with conforming loan balances ($806,500 or less) increased to 6.4% from 6.37%, with points decreasing to 0.60 from 0.62 (including the origination fee) for 80% loan-to-value ratio loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed mortgages with jumbo loan balances (greater than $806,500) increased to 6.49% from 6.39%, with points increasing to 0.55 from 0.42 (including the origination fee) for 80% LTV loans. The effective rate increased from last week

The average contract interest rate for 30-year fixed mortgages backed by the FHA increased to 6.15% from 6.14%, with points decreasing to 0.79 from 0.84 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed mortgages decreased to 5.8% from 5.83%, with points increasing to 0.72 from 0.69 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for a 5/1 ARM decreased to 5.44% from 5.65%, with points decreasing to 0.54 from 0.81 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

"Rates have increased by around 10 basis points over the past four weeks, and given that many borrowers have been looking to capitalize on rate drops, refinance applications last week declined almost 6% to the slowest weekly pace since September," Kan added.

Mortgage rates calculated

Mortgage rates are calculated by various factors in the economy, and the length of your loan will also figure into the mortgage rate you qualify for.

The 30-year mortgage rate is tied to the yield of the 10-year Treasury note, according to Fannie Mae. As the yield on the 10-year Treasury note moves, mortgage rates follow.

The yield on the 10-year Treasury note is determined by expectations for shorter-term interest rates in the economy over the duration of a bond, plus a term premium.

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