Last week, mortgage applications increased compared to a week earlier despite very high mortgage rates, all of which dropped simultaneously this week.
According to Freddie Mac, this week average mortgage rates dropped, but we've continued to see some of the highest levels so far this year.
30-year fixed-rate mortgages decreased slightly to 3.97% this week, compared to 3.98% a week earlier.
15-year fixed-rate mortgages also dropped, reaching 3.18% this week as opposed to 3.2% last week.
5-year adjustable-rate mortgages decreased the most this week, dropping to 2.98% compared to 3.03% the previous week.
1-year adjustable-rate mortgages also dropped one percentage point, from 2.65% one week ago to 2.64% this week.
This average mortgage rates decrease occurred only one week after a 6.2% increase in mortgage applications took place on the week ending November 13, 2015, according to the MBA Weekly Mortgage Applications Survey, with the average loan size for purchase applications increasing to $301,200.
This same survey documented a drop in the refinance share and adjustable-rate mortgage share of total applications as well, with the refinance share of mortgage activity dropping from 59.8% two weeks ago to 58.6% last week and the adjustable-rate mortgage share of activity also decreasing to 6.3% last week compared to 6.6% a week earlier.
The composition of mortgage applications changed last week, with the FHA share of all applications rising to 14.4% compared to 14.1% a week earlier and the VA share of all applications rising from 10.9% two weeks ago to 11.7% last week. The USDA share of total applications didn't change, however, and remains at 0.7% for the third consecutive week.