Homebuyers made time to apply for a mortgage before and after Thanksgiving, with demand for purchase loans hitting a new 2025 high last week after adjusting for the holiday, the Mortgage Bankers Association reported Wednesday.
Applications for purchase loans were up by a seasonally adjusted 3 percent last week compared to the week before and 17 percent from a year ago, the MBA’s Weekly Mortgage Applications Survey showed.
Joel Kan
“Mortgage rates moved lower in line with Treasury yields, which declined on data showing a weaker labor market and declining consumer confidence,” MBA Deputy Chief Economist Joel Kan said, in a statement.
After adjusting for the impact of the Thanksgiving holiday, requests to refinance were down 4 percent week over week but up 109 percent from a year ago.
Homebuyer demand hits new 2025 high
Source: Mortgage Bankers Association.
At 186.1, the MBA’s seasonally adjusted purchase loan index for the week ending Nov. 28 was at its highest level of the year.
“Purchase applications were up slightly, but we continue to see mixed results each week as the broader economic outlook remains cloudy, even as cooling home-price growth and increasing for-sale inventory bring some buyers back into the market,” Kan said.
Mortgage rates near 2025 low
Rates for 30-year fixed-rate conforming loans hit a new 2025 low of 6.12 percent on Oct. 28, according to lender data tracked by Optimal Blue.
Mortgage rates rebounded after the Federal Reserve cut rates on Oct. 29 on warnings by Fed Chair Jerome Powell that a December rate cut was not a given. But a Nov. 20 report showing unemployment ticked up in September put a December rate cut back on the table.
The CME FedWatch tool, which tracks futures markets to predict the probability of future Fed moves, on Wednesday put the odds of a Dec. 10 rate cut at 89 percent, up from 30 percent on Nov. 19.
With unemployment expected to continue rising next year, forecasters at Pantheon Macroeconomics expect that Federal Reserve policymakers will gradually bring the short-term federal funds rate down by a full percentage point this year and next, with quarter percentage point reductions in December, March, June and September.
Unemployment rising
The unemployment rate rose to 4.4 percent in September, with 7.6 million Americans out of work, and Pantheon Macroeconomics is forecasting that it will peak at 4.8 percent next spring.
One question Fed policymakers will have to tackle next year is whether the natural unemployment rate is on the rise because of lower immigration, AI, tariffs and federal job cuts, Pantheon economists Samuel Tombs and Oliver Allen wrote in their Dec. 3 U.S. Economic Monitor.
“In theory, the equilibrium unemployment rate might be rising because tighter restrictions on immigration have drained the pool of workers that employers can draw on to fill openings,” Tombs and Allen wrote. “In addition, new tariffs recently have contributed to a decline in employment in the manufacturing sector, which risks a geographically concentrated rise in unemployment in the industrial heartlands.”
AI may reduce demand for relatively unskilled workers in clerical and customer services roles, and it’s likely many of those people will struggle to find a new job, the economists said.
Fed policymakers in September put the natural or equilibrium unemployment rate at 4.1 percent, which would be an argument for easing monetary policy by lowering interest rates.
While inflation hawks are likely to argue that the equilibrium unemployment rate is higher, Pantheon forecasters say that so far, the evidence is unconvincing, as businesses are having no issues filling openings and plan to slow wage growth.
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