Affordable conditions may prompt many first-time buyers to meet with real estate agents to find the perfect home. However, current homeowners continue to contribute greatly to activity, as evident in the most recent Weekly Mortgage Applications Survey from the Mortgage Bankers Association.
On an overall basis, the Market Composite Index shows mortgage loan applications jumped 4.5 percent for the week ending November 30, up from the week before which posted a decline, likely due to Thanksgiving. Home buying is not typically popular throughout the holiday season, though high affordability may post unusually better mortgage records this year. On an unadjusted basis, the index posted a 49 percent improvement from the week before.
Additionally, the Purchase Index was up just 0.1 percent on an adjusted basis and posted a 36 percent improvement when measured on an unadjusted basis. The Refinance Index moved forward 6 percent, indicating many current homeowners may be looking to alter their initial mortgage agreement.
According to the survey, refinances accounted for 83 percent of all activity in the last week of November, up from the 81 percent reported the week before. This has been a trend throughout much of the year, as strict lending standards have made it more difficult for buyers to get approved, while those who already made the investment may have an easier time.
Recent news of improving economic factors and a stabilizing housing market have improved both buyer and seller confidence, as reported by Redfin last month. With more consumers agreeing that now would be a good time to purchase a home, the gap between supply and demand has become smaller, while affordability offered by mortgage rates has also likely prompted the jump in activity.
In the most recent Primary Mortgage Market Survey, Freddie Mac revealed average rates for fixed-rate mortgage continue to remain low. While many economists predicted rates would inflate alongside home prices, other housing market factors including prices and home sales have been on the rise, posting significant growth when compared to the end of last year.