Mortgage Daily Logo
mortgage news from industry experts

Bright Economic Outlook Dampening Mortgage Activity

While the long Thanksgiving weekend slowed mortgage application activity, rates rose slightly, and speculation of a better economy will keep them on an incline, analysts say.

For the week ending Nov. 28, the mortgage application activity index dropped 11.7% from the previous week to 685.1, said the Mortgage Bankers Association of America in its Weekly Mortgage Applications Survey. A year ago, the index stood at 939.0.

The MBA reported the purchase money application index decreased by 3.9% to 441.8, but the index for refinance applications plunged 19.6% to 2100.0. Refinances accounted for half the share of total application activity, down 3.3% from the previous week.

The ARM share of activity nudged down to 26.6%, said the MBA. Freddie Mac reported that one-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 3.77%. The latest cost of funds index, which competes with the one-year Treasury for ARM loans, came in at 1.909% in October, falling 1 basis point (BPS) from September, reported the Federal Home Loan Bank of San Francisco.

According to Freddie’s Primary Mortgage Market Survey for the week ending Dec. 5, the 30-year fixed-rate mortgage averaged 6.02%, up 13 BPS from the previous week. A year ago, the average was higher at 6.19%.

Up 14 BPS, Freddie averaged the 15-year at 5.36%.

“Financial markets are speculating about what the Federal Reserve Board will say when it meets next week,” said chief economist Frank Nothaft in Freddie’s announcement. “And it looks like the market is taking bets that the Fed will soften its language and raise rates sooner rather than later. As a result, bond yields drifted higher and with them went mortgage rates.

At Thursday’s close, the 10-year Treasury note yield stood at 4.36% and the price at 99 2/32. At the end of last week, the yield was 4.25%.

According to, rates rose because of anticipated consumer spending for the holidays, but sales reports from the after-Thanksgiving weekend were not as great as some retailers had wished.

“The economy is feeling a bit jiggy with the good employment numbers and early retail reports recently,” said a mortgage analyst at “Rates will most likely start to anticipate better days and rise gradually in the coming months. Do your holiday shopping and rate shopping now before the good deals are gone.”

This week, 45% of site’s panel of mortgage industry experts predicted rates will go up over the next 30 to 45 days. Meanwhile, 37% of the panel voted rates will remain unchanged and 18% forecasted they will decrease.

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...


Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts