US mortgage applications grow despite rise in mortgage rates

US mortgage applications grew 1.8% in the week ended 19 November, following a 2.8% fall in the previous week.

According to the Mortgage Bankers Association, its purchase index jumped 4.7% week-on-week and its refinancing one edged up 0.4% despite the average fixed 30-year mortgage rate increasing four basis points to 3.24%.

MBA economist Joel Kan said: "Both conventional and government loan applications increased, and the average loan size for a purchase loan was at $407,200, continuing its ongoing 2021 run of being mostly above $400,000. The financial markets continue to discern the Federal Reserve's policy path in the coming months in light of the current high growth, high inflation environment.

"Despite a fair amount of rate volatility last week, mortgage rates were higher. Borrowers continue to lock in mortgages in anticipation of higher rates in the future."