Borrowers submitted home purchase applications at the fastest pace since September last week, according to the latest figures from the Mortgage Bankers Association (MBA).

The MBA’s Mortgage Composite Index (MCI), which measures mortgage loan application volume, rose 0.6% from the previous week on a seasonally adjusted basis. The index fell 1% on an unadjusted basis.

Mortgage rates have risen slightly in the wake of the Federal Reserve’s late October policy meeting, which concluded with a 0.25% reduction to the federal funds rate for the second time in as many months.

Mortgage demand cooled last week after a brief rebound that saw a year-over-year bump in activity, reversing consecutive weeks of declines in late September and early October.

The uptick has not bothered borrowers, said Joel Kan, deputy chief economist of the MBA, noting in a press releases that “potential homebuyers continue to shop around, particularly in markets where inventory has increased and sales price growth has slowed.”

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 6.34% from 6.31% the week before, according to MBA data.

The average interest rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration (FHA) increased to 6.14% from 6.13%.

“Based on the unadjusted purchase index for the week, this was the strongest start to November since 2022,” Kan added.

Refinances continued to make up the largest share of total mortgage activity but saw their share slip to 55.6% from 57% the week prior as slightly higher rates quelled demand.

The refinance component index of the MCI fell 3% from the previous week but was 147% higher than the same week last year.

The FHA share of total applications increased to 19.4% from 18.5% the week prior, while the share of applications for mortgages backed by the U.S. Department of Veterans Affairs remained essentially flat at 14.8%.

The adjustable-rate mortgage (ARM) share of activity decreased to 7.8% of total applications, down from last week’s 8.7%. The ARM share of applications had climbed to nearly 11% three weeks prior.

The average contract interest rate for 5/1 ARMs — whereby a borrower pays a fixed mortgage rate for the first five years of the loan term, after which it adjusts on an annual basis — fell to 5.5% from 5.56% last week.