Refinance Application Volume Shoots Up 300% Over Last Year…Thanks to Thanksgiving
Nov 29th, 2019 @ 10:23 PM by Amber Nelson
Total refinance application volume jumped 314% this week compared to last year but was just 4% higher than the week before, according to the Mortgage Bankers Association.
And although that 300%+ number sounds jaw-dropping, it really isn’t a fair comparison as the same week last year included Thanksgiving. So of course, fewer people were out applying for a home loan last year; they were traveling to have some turkey with their loved ones.
Home purchase mortgage requests showed a similar pattern. They were up 55% over last year but fell 1% for the week. To date, all year-over-year increases have only been in the single digits, so the weekly change provides a much more accurate picture of the housing market.
Overall, mortgage application volume increased 1.5% in the latest week and 153% compared to last year’s Thanksgiving holiday week.
Mortgage interest rates are also affecting mortgage requests. The average rate on a conforming 30-year fixed-rate home loan slipped to 3.97% with 0.30 point, down from 3.99% with 0.33 point the week before. On a yearly basis, that mortgage rate is down a full point from 5.12%.
“Mortgage rates stayed below 4% for the second straight week and borrowers responded positively,” said Joel Kan, associate vice president of economic and industry forecasting at the MBA. “Refinances have been strong this month, but we are starting to see the average pace slow compared to the peak experienced in August through October.”
That slowing pace might come from the shrinking group of homeowners who have not yet refinanced to historically low rates. So many people have already refinanced that there simply may not be many left who qualify or who would still benefit from today’s rates.
And home buying continues to suffer from serious inventory shortages and increasing prices. Until those issues start to ease, home purchase applications may decline again in coming weeks.
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.