For the week ending Nov. 25, mortgage application activity plunged 11.7%, as reported by the Mortgage Bankers Association (MBA). The results were adjusted for the Thanksgiving Day holiday.
The Refinance Index dropped 15.3% to 2834.5, which is the lowest level since July when 30-year fixed mortgage rates were in the 4.50% area. As a percent of total application activity, refinancing share decreased to 73.9% from 75.9%, and is also at its lowest level since July. Meanwhile, the Purchase Index slipped 0.8% to 192.1.
The average contract rate for 30-year fixed mortgage rates eased during the week with conforming loan rates at 4.21% from 4.23%, jumbo rates down four basis points to 4.55%, while Federal Housing Administration (FHA) rates decreased to 4.0% from 4.05%. The MBA noted that the FHA rate is at its lowest since January of this year.
Through last Friday, refinancing activity is down nearly 7% on average for the month from October, even as mortgage rates have averaged 3.99%, down eight basis points from the prior month. This will filter into December's prepayment activity which currently is projected to be essentially flat from November. November prepayment reports, which will be out next week, are anticipated to increase less than 5%.
Prepayments from Home Affordable Refinance Program are not expected to show until February at the earliest with more impact showing in the second quarter