Kan noted that improvements were most significant for cash-out refinance programs and loans requiring lower loan-to-value ratios (LTV) and higher credit scores. Additionally, jumbo loan programs saw increased availability, contributing to the rise in the jumbo MCAI.
The Conventional MCAI, tracking non-government-backed loans, rose by 1.0%, while the Government MCAI, which includes loans backed by FHA and VA programs, increased by 0.4%. Among conventional loans, jumbo loans saw the largest growth, with the jumbo MCAI rising by 1.2%, followed by a 0.9% uptick in the Conforming MCAI, which covers loans that meet Fannie Mae and Freddie Mac limits.
Rising rates stall applications
Even as credit availability improved, rising mortgage rates continued to dampen refinancing activity.
The average rate for 30-year fixed-rate mortgages with conforming loan balances climbed to 6.86% in October, the highest since July 2024. This include limited refinancing demand, with the MBA’s Refinance Index dropping 2% compared to the previous week. Despite the decline, refinancing activity was still 43% higher than the same period a year ago.
“Mortgage rates continued to increase last week, driven by higher Treasury yields as financial markets digested the likely impacts of a Trump presidency,” Kan said. “The Federal Reserve’s 25-basis-point rate cut was already anticipated and did little to move the markets. However, despite the increase in rates, applications increased for the first time in seven weeks.”
