Mortgage Rates Jump, But Purchase Loan Demand Still Rises

Mortgage Weekly Update

Mortgage rates increased this week, hitting 3.10% on the average 30-year loan. That’s up from 2.98% a week prior.

Despite the increase, purchase loan activity increased 2% over last week, according to the Mortgage Bankers Association.

“Purchase applications increased for both conventional and government loan segments, as housing demand continues to show resiliency at a time — late fall — when home buying activity typically slows,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “The second straight increase in purchase applications suggests that stronger sales activity may continue in the weeks to come. Despite elevated demand, purchase applications were 5.7 percent lower than a year ago.”

Refinances, on the other hand, dropped 4% for the week.

“Refinance applications decreased for the seventh time in eight weeks, as mortgage rates moved higher after two weeks of declines,” Kan said. “Activity has been particularly sensitive to rate movements, and last week’s decline was driven by a drop in conventional and FHA refinance applications, which offset an increase in VA refinance applications.

Overall, refinances accounted for 62.9% of all mortgage activity, down from 63.5% the week prior.

More in mortgage & housing news

  • Interest in new homes is waning. According to MBA, mortgage applications to purchase a new home were down 6% from September to October and have now decreased 15.2% over the last year.
  • Real estate investors have been active this year. According to Redfin, investors purchased a record-setting 18% of all homes sold in the third quarter of this year. Investors were most active in Atlanta, Phoenix, Charlotte, Jacksonville, and Miami.
  • The hottest housing markets last month were: Manchester-Nashua, New Hampshire; Burlington, North Carolina; Eureka-Arcata-Fortuna, California; Rochester, New York; and Elkhart-Goshen, Indiana. According to homes in Eureka are selling 24 days faster than this time last year.
  • Zillow reported this week that the housing market is “settling into a new normal.” Home price growth slowed to 1.3% in October, and homes are starting to stay on the market a bit longer. There was also an increase in the number of price cuts in October. “All in, the signs point to a for-sale market that seems to be adjusting to a new normal after more than a year of norm-busting behavior, albeit at a still historically strong level,” the report states.

This week in mortgage rates

Interest rates increased on all 15-year and 30-year loans this week, while rates on 5/1 ARMs fell, according to Freddie Mac.

Here’s how rates looked for each loan type:

Make sure to check back here next week for the latest mortgage rates and news.

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By Aly Yale / November 18th, 2021 / Categories: / Tags:

Aly Yale

Aly J. Yale is a freelance writer focusing on real estate, mortgage, and the housing market. Her work has been featured in Forbes, Bankrate, The Motley Fool, Business Insider, The Balance, and more. Prior to freelancing, she served as an editor and reporter for The Dallas Morning News. She graduated from Texas Christian University's Bob Schieffer College of Communication with a major in radio-TV-film and news-editorial journalism. Connect with her at or on Twitter at @AlyJwriter.