Mortgage applications rise 2.5% as rates drop

Mortgage applications in the US jumped last week as fees on borrowing dropped in the wake of data showing a softening labour market, though levels still remain a low levels.

According to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey, applications were up 2.5% in the week ended 3 November.

That follows a 2.1% fall the previous week.

Refinancing applications rose by 2% while purchasing applications jumped 3% – though these two measures were down 7% and 20% on the same period last year, respectively.

“The 30-year fixed mortgage rate dropped by 25 basis points to 7.61 percent, the largest single-week decline since July 2022,” said Joel Kan, MBA’s vice president and deputy chief economist.

“Last week’s decrease in rates was driven by the U.S. Treasury’s issuance update, the Fed striking a dovish tone in the November FOMC statement, and data indicating a slower job market."

Nevertheless, Kan pointed out that purchase levels were still substantially lower than last year, as "many homebuyers remain on the sidelines until more for-sale inventory becomes available".