Both purchase and refinance applications increased to their highest weekly pace in five weeks after mortgage rates logged the largest decline in a year.

Total home loan applications increased 2.8% for the week ending Nov. 10 compared to the previous week, according to weekly data from the Mortgage Bankers Association (MBA).

The 30-year, fixed mortgage rate averaged 7.5%, falling 26 basis points in one week, according to Freddie Mac‘s Primary Mortgage Market Survey. It was the largest one-week decrease recorded since November 2022, prompted by a decline in the 10-year Treasury yield last week.

However, “mortgage rates at current levels are still challenging for many prospective homebuyers and current homeowners,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. 

Purchase applications rose 3% week over week while refinance applications inched up by 2% over the same time period. Meanwhile, the adjustable-rate mortgage (ARM) share of activity decreased to 8.8% of total applications, down from 9.8% the previous week.

The share of Federal Housing Administration (FHA) loan activity decreased to 14.4% of all applications, down from 14.7% the week prior. The share of Department of Veterans Affairs (VA) loan activity was 11.2%, up from 10.5% while the share of U.S Department of Agriculture (USDA) loan activity held at 0.5% week over week.