Mortgage applications picked up for the first time in four weeks as mortgage rates dropped by 25 basis points, to 7.61%. The Fed’s rate hike pause, combined with a softer October jobs report and the U.S Treasury’s issuance update, paved the way for rates to come down.
For the week ending Nov. 3, total home loan applications increased 2.5% compared to the week prior, according to weekly mortgage application data from the Mortgage Bankers Association (MBA).
“Applications for both purchase and refinance loans were up over the week but remained at low levels,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. “”The purchase index is still more than 20% behind last year’s pace, as many homebuyers remain on the sidelines until more for-sale inventory becomes available.”
Purchase applications increased 1% from the week prior and were 20% lower compared to the same week a year ago. Refinance applications inched up by 2% from the previous week and fell 7% from the same time period in 2022. Meanwhile, the adjustable-rate mortgage (ARM) share of activity decreased to 9.8% of total applications.
The share of Federal Housing Administration (FHA) loan activity remained unchanged at 14.7%. The share of Department of Veterans Affairs (VA) loan activity was 10.5%, up from 10.1% while the share of Department of Agriculture (USDA) loan activity remained unchanged at 0.5% week over week.