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Illustration by Lanette Behiry/Real Estate News

Mortgage applications trend higher in mid-November 

The number of home loan applications rose for two straight weeks this month, coinciding with falling interest rates.

November 28, 2022
2 minutes

Key points:

  • This is the first time in two months that mortgage applications were up two weeks in a row, according to the Mortgage Bankers Association.
  • “This is still a period of extremely elevated volatility," said MBA deputy chief economist Joel Kan.

Home mortgage applications increased from Nov. 4-Nov. 18, marking the first time in three months that the number of borrowers rose for two consecutive weeks.

The number of mortgage applicants in the U.S. rose 2.2% for the week that ended Nov. 18, which followed a 2.7% application increase from the previous week, according to the Mortgage Bankers Association, which publishes a weekly applications survey. 

The latest increase was on a seasonally adjusted basis and took into account the Veterans Day holiday, the MBA reported. 

Joel Kan, deputy chief economist with the MBA, attributed the rise to a more favorable borrowing rate for 30-year home loans. Kan told Real Estate News that he expects average mortgage rates to "hover at 6.7%" for the rest of the year.

The average mortgage rate had dipped to 6.67% over the same period, the lowest rate in two months. 

"This is still a period of extremely elevated volatility, so rates can move quickly both up and down in a short span of time," Kan said.  

"However, incoming data suggesting slowing of inflation, slower wage growth, and other signs that the U.S. and global economies are headed toward a slowdown next year are consistent with our current forecast, and we expect the 30-year fixed rate to average 6.7% in the fourth quarter of 2022."

Mortgage purchase applications for the week ending Nov. 18 were still much lower than they were for the same week a year ago — off by more than 40% from the same period in 2021. 

Kan said earlier this month that more favorable mortgage rates "should improve the purchasing power of homebuyers, who have been largely sidelined as mortgage rates have more than doubled in the past year." 

Applications to refinance homes also went up 2% for the week that ended Nov. 18, the MBA reported. But the number of borrowers seeking to refinance is still 86% lower than for the same week in 2021. 

Although the Federal Reserve does not directly control mortgage interest rates, rate hikes since March 2022 to rein in inflation have led to higher costs to borrow money to buy and refinance homes.

The federal government will release its next inflation report in mid-December, with action by the Federal Reserve expected to follow.

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