U.S. Mortgage Applications Grow Despite Rising Rates: MBA

(RTTNews) - Home loan approvals and purchase activity in the U.S. increased in the week ended November 21 even as mortgage rates continued to climb, survey data from the Mortgage Bankers Association revealed on Wednesday.

The market composite index that measures the house purchase mortgage loan application volume rose a seasonally adjusted 0.2 percent after a 5.2 percent fall in the previous week, results of the MBA Weekly Mortgage Applications Survey revealed.

The refinance index fell 6 percent following a 7 percent decrease in the previous week, the MBA survey showed. The purchase index surged 8 percent, after a 2 percent fall in the previous week.

The MBA survey also showed that the refinance share of mortgage activity decreased further to 53.4 percent of total applications from 55.4 percent in the previous week. The adjustable-rate mortgage (ARM) activity share rebounded to 7.9 percent from 7.5 percent.

The 30-year fixed mortgage rate climbed for a fourth straight week to 6.40 percent from 6.37 percent. The latest rate was the highest since early October.

"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," MBA Vice President and Deputy Chief Economist Joel Kan said.

Kan also noted that the government purchase index that combines FHA, VA, and USDA applications, rose 9 percent, which was the strongest weekly outcome since 2023.

"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," Kan said. "The average purchase loan size decreased to its lowest level in two months."

"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 percent to the slowest weekly pace since September," the economist added.