Lower mortgage rates have brought increased mortgage demand. Total home loan applications increased 0.3% for the week ending Nov. 24 compared to the previous week, according to data from the Mortgage Bankers Association (MBA).

Mortgage rates for the 30-year fixed loan averaged 7.29% as of Nov. 22, falling 15 basis points in one week, according to Freddie Mac‘s Primary Mortgage Market Survey. Over the past six weeks, mortgage rates have fallen by more than 50 basis points.

“The purchase market remains depressed because of the ongoing, low supply of existing homes on the market,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. “Similarly, refinance activity will likely be muted for some time, even with the recent decline in rates, as many borrowers locked in much lower rates in 2020 and 2021.”

The decline in mortgage rates spurred a small increase in purchase applications last week; they ticked up 5% on a seasonally adjusted basis from the prior week. However, activity was 20% lower than a year ago on an unadjusted basis. Meanwhile, refinance activity slumped, decreasing 9% from the previous week. However, it was 1% higher than the same week a year ago. The refinance share of mortgage activity fell to 30.6% of total applications, down from 32.4% the previous week. 

The adjustable-rate mortgage (ARM) share of activity decreased to 8.1% of total applications.

The share of Federal Housing Administration (FHA) loan activity decreased to 13.5%, down from 14.8% the week prior. The share of Department of Veterans Affairs (VA) loan activity was 12.6%, down from 11.3% over the previous week, while the share of U.S. Department of Agriculture (USDA) loan activity rose to 0.5%, up from 0.4% last week.

On Tuesday, the FHFA announced that its new baseline conforming loan limit for mortgages backed by Fannie Mae and Freddie Mac in 2024 will be $766,550, up 5.5% compared to the current limit of $726,200.