Smart Borrower Blog

Mortgage Volume Unchanged Amid Lower Rates


Nov 6th, 2019 @ 2:36 PM by Amber Nelson


Long-term U.S. mortgage interest rates fell in the latest week, but it was not enticing enough to bring borrowers to the mortgage table, according to data from the Mortgage Bankers Association.

The MBA’s mortgage application index fell 0.1% during the week ended November 6, 2019, with a 2% increase in refinance requests being offset by a 3% decline in home purchase applications. Mortgage volume has been virtually unchanged for two straight weeks.

Even though they made only a small rise this week, refinance applications were up 144% compared to a year ago and home purchase requests were up 7% over the same time. And total mortgage volume has grown 60% in the past year.

During the past week, the average rates on a 30-year conforming, fixed-rate mortgage fell to 3.98% with an average 0.37 point, down from 4.05% the week before. However, rates are now at their highest level in roughly three months. A year ago, rates were much higher at 4.83%.

As to why rates decreased, “U.S. Treasury yields once again exhibited some intraweek volatility before declining sharply toward the end of the week,” said Joel Kan, associate vice president of economic and industry forecasting.

Still, while interest rates have a direct impact on refinance activity, home purchase volume is less susceptible to changes in rates. Homebuyers likely stayed away from the mortgage table because of tight housing inventory rather and rising prices. Homes in the lower price ranges have been especially scarce.

“Amidst persistent supply constraints in the entry-level price range, there’s evidence that high-end homebuyers are more active this fall,” said Kan. “The average loan size for purchase applications increased to its highest level since May.”

Home purchase mortgage volume may continue to not see much movement until more first-time homebuyer properties are more readily available.

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

Leave a Reply