Drop In Interest Rates Spur Mortgage Applications And Refinancing

A downtick in mortgage rates spurred homebuyers in the November 23 week, with purchase applications rising a seasonally adjusted 9 percent from the prior week to lift their unadjusted level back into positive year-on-year territory, 2 percent higher than in the same week last year. Refinancing applications rose 1 percent in the week, while the refinance share of mortgage activity declined by 0.6 percentage points to 37.9 percent, the lowest level in 18 years. The average interest rate on 30-year fixed-rate conforming mortgages ($453,100 or less) fell for the second week in a row and was down 4 basis points from the prior week to 5.12 percent. The week's data reflects adjustments for the Thanksgiving holiday. Whether the sharp weekly pickup in purchase applications is an adjustment-induced aberration or a longer-term development remains to be seen in the weeks to come, but it does give hope of a return of strength to a housing market showing increasing weakness in recent months. The release of New Home Sales data for October later this morning will shed further light on the nation's housing market.