"Volume always drops significantly during Thanksgiving week. However, even after adjusting for the holiday, with rates little changed last week, refinance volume slipped to its lowest level since late July," said Michael Fratantoni, the association's chief economist.
Refinance applications decreased 6 percent from the previous week, seasonally adjusted. Loan applications to purchase a home, which are less influenced by small rate moves, rose 8 percent for the week. Purchase applications are now 30 percent higher than the same week one year ago. It may be that buyers are rushing in now, concerned that interest rates will move decidedly higher at the start of 2016.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.12 percent from 4.14 percent, with points increasing to 0.5 from 0.49 (including the origination fee) for 80 percent loan-to-value ratio loans.
Mortgage rates actually made their biggest move Tuesday, falling back into the 3 percent range, after a weaker-than-expected manufacturing report sent investors fleeing to the bond market. Mortgage rates loosely follow the yield on the U.S. 10-year Treasury.