It's been a bumpy few weeks for the mortgage market. However, new data shows that some borrowers haven't been deterred, sending demand for purchase loans and refinances higher.
The Mortgage Bankers Association has reported that its market composite index, a measure of mortgage loan application volume, climbed 0.6 percentage points in the week ended Nov. 7 compared to the previous week.
It's a seemingly negligible change, but the cause behind the increase is notable: Purchase applications were up 6% compared to the previous week, marking their strongest weekly pace since September, according to Joel Kan, the MBA's deputy chief economist.
Zoom out even further, and the trend becomes more pronounced. Compared to the same week a year earlier, purchase applications increased 31%, making this the strongest start to November for the mortgage market since 2022, Kan said.
"Potential homebuyers continue to shop around, particularly in markets where inventory has increases and sales price growth has slowed," Kan said in a statement.
Indeed, across much of the United States, the last few months have brought more homes for sale and slowing price appreciation, according to exclusive data from Homes.com.
Refinance market stays resilient, even as mortgage rates move
Homebuyers aren't the only ones benefiting from recent changes in the housing market.
Refinance applications have more than doubled compared to last year, according to the MBA's data. Although there have been weekly fluctuations in the association's measure of refinances, the big picture is clear: More homeowners are taking advantage of mortgage rates that are lower than a year ago.
The latest data from mortgage giant Freddie Mac had the 30-year, fixed-rate mortgage averaging 6.22%. Though that marked a weekly increase, that is still 0.57 percentage points lower than the average was a year earlier. In other words, borrowers could find big savings with today's mortgage rates compared to last year's.
In fact, data from capital markets platform Optimal Blue released Tuesday showed that refinance demand has bucked seasonal trends this year, remaining strong this fall during what's typically a slower period.
“October’s data speaks to the market’s resilience,” Mike Vough, head of corporate strategy at Optimal Blue, said in a statement. “Purchase activity held steady and refinance demand — particularly cash-outs — remained strong ... October delivered another standout month for originations."