With mortgage rates falling for the fifth consecutive week, newer homeowners who locked in higher rates are looking for ways to reduce their monthly mortgage costs — and they’re doing so by refinancing in flock-like numbers.

What Happened: Applications to refinance a home loan jumped 6% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

Total refinance application volume, however, was still 85% lower than the same week one year ago, indicating that most homeowners have locked in rates at or below the current 6.31%.

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For loans requiring a 20% down payment, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) dropped from 6.42% to 6.31%, while the number of points (including the origination fee) went from 0.64 to 0.59.

Mortgage applications for home purchases fell 0.1% for the week and were 36% lower than they had been during the same week last year. While rates are lower than they were a month ago, they are still more than twice what they were a year ago.

Home Sales

According to data issued by the National Association of Realtors Wednesday, sales of existing homes fell for the tenth month in a row, falling 7.7% in November compared to October.

The slowdown in the real estate industry is reflected in sector stocks, as the Vanguard Real Estate Index Fund ETF VNQ is down over 26% year to date.

The Numbers: Total sales, which include completed transactions of single-family homes, townhomes, condominiums and co-ops, fell 7.7% to a seasonally adjusted annual rate of 4.09 million in November.

Year-over-year, sales dwindled by 35.4%, indicating most Americans are continuing to stay away from the under-supplied, and increasingly unaffordable housing market.

"In essence, the residential real estate market was frozen in November, resembling the sales activity seen during the COVID-19 economic lockdowns in 2020," said NAR Chief Economist Lawrence Yun.

The median existing-home price for all housing types in November was $370,700, an increase of 3.5% from November 2021 ($358,200), as prices rose in all regions.

This marks 129 consecutive months of year-over-year increases, the longest-running streak on record.

"The principal factor was the rapid increase in mortgage rates, which hurt housing affordability and reduced incentives for homeowners to list their homes. Plus, available housing inventory remains near historic lows," Yun said.

Read also: US Housing Starts: Single Family Permits Fall, But Completions Rise, Adding Supply

Other Data: Properties remained on the market for an average of 24 days in November, up from 21 days in October and 18 days in November 2021. The National Association of Realtors also reported: 

• Roughly 61% of homes sold in November 2022 were on the market for less than a month
• First-time buyers were responsible for 28% of sales in November
• All-cash sales accounted for 26% of transactions in November
• Individual investors or second-home buyers purchased 14% of homes in November
• Foreclosures and short sales represented 2% of sales in November

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