Mortgage applications slip even as rates ease
Mortgage applications dipped again in late November, highlighting how tentative demand remains even as borrowing costs ease. The MBA’s Market Composite Index fell 1.4% on a seasonally adjusted basis during the holiday week, with unadjusted activity dropping sharply. Rates moved lower across mortgage products, 30-year fixed rates slid to 6.32% and 5/1 ARMs hit their lowest point since mid-2023, but borrowers stayed cautious. Refinance activity declined despite the rate drop, while purchase applications saw only a slight increase, reflecting ongoing uncertainty and affordability pressures.
Although purchase activity improved 3% on a seasonally adjusted basis and remained above last year’s levels, unadjusted volumes fell significantly due to the holiday slowdown. Refinances dropped 4% week over week but were still more than double year-ago levels, making up 53% of applications. The broader pattern mirrors trends from 2024 and 2025: modest rate relief brings temporary boosts, but high home prices, mixed economic signals and the lock-in effect continue to restrain momentum. As a result, lenders face an uneven, rate-sensitive market rather than a sustained recovery.
