Mortgage application activity rose 4.5% in the week ending Nov. 30, according to the Mortgage Bankers Association's weekly survey. The increase resulted from slightly lower mortgage rates as well as from some normalcy returning to activity following the Thanksgiving Day holiday in the prior week.

The increase in activity was largely driven by refinancing, as the Purchase Index was essentially flat at 206.5 compared with 206.3 a week earlier. By comparison, the Refi Index gained 6.1% to 4857 as refinancing share of total applications increased to 83% from 81%. The MBA also reported that HARP applications were up as a percentage of refinancing applicatins at 27% versus 26% in the previous report.

For the month of November, refinancing activity averaged just 4% lower than in October at 4720, while 30-year mortgage rates averaged 3.34%, versus 3.38% previously (based on Freddie Mac's survey). At the same time, the four-week moving average has steadily increased over the past three weeks. 

This supports current expectations that prepayment speeds will be slightly lower in December from November, with a lower number of collection days a factor, and that prepayment speeds will be flat to slightly higher in January, partly due to a higher day count. (December and January prepayments are reported in January and February, respectively.)

The MBA also reported the contract interest rate for 30-year fixed rate conforming loans fell 1 basis point to 3.52%, matching the lowest rate in the history of the survey, while Federal Housing Administration rates also declined to match the lowest rate of 3.34% from 3.36% previously.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.