Per the Mortgage Bankers Association’s (MBA) survey through the week ending November 3rd, total mortgage activity increased 2.5% from the previous week and the average 30-year fixed-rate mortgage (FRM) rate fell 25 basis points to 7.61%. The FRM rate has decreased by 6 basis points over the past month but has hovered between 7.5% and 8.0% for six consecutive weeks.
The Market Composite Index, a measure of mortgage loan application volume, rose by 2.5% on a seasonally adjusted (SA) basis from one week earlier. Purchasing activity increased 3.0% and refinancing activity increased 1.6% week-over-week.
While the market composite index increased over the week, mortgage activity remains largely muted due to the continuing lack of existing for-sale inventory. The seasonally adjusted purchase index was 20.7% lower than one year ago while the seasonally adjusted refinancing index was 6.9% lower than one year ago.
The refinance share of mortgage activity rose from 31.2% to 31.4% over the week while the adjustable-rate mortgage (ARM) share of activity fell to 9.8% from 10.7%. The average loan size for purchases was $405,200 at the start of November, down from $413,200 over the month of October. The average loan size for refinancing decreased from $247,800 over the month of October to $243,700. The average loan size for an ARM was down at start of November to $742,300 while the average loan size for a FRM fell to $312,400.
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The slight increase in mortgage activity amidst decreasing rates signals a potential opportunity for home construction projects. Builders exploring new ventures or expanding their portfolios could leverage construction loans to capitalize on favorable market conditions, ensuring the timely and efficient realization of their projects.