Mortgage applications decreased 0.6% from one week earlier, according to data from the Mortgage Bankers Association‘s (MBA) Weekly Mortgage Applications Survey for the week ending Dec. 17.
The Market Composite Index, a measure of mortgage loan application volume, decreased 0.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index decreased 1% compared with the previous week. The Refinance Index increased 2% from the previous week and was 42% lower than the same week one year ago. The seasonally adjusted purchase index decreased 3% from one week earlier. The unadjusted purchase index decreased 6% compared with the previous week and was 9% lower than the same week one year ago.
“Mortgage applications fell last week, driven by a three percent decline in purchase applications,” says Joel Kan, the MBA’s associate vice president of economic and industry forecasting. “Both conventional and government purchase applications were down, while the average purchase loan increased for the second straight week to $416,200 – the second highest amount ever. The elevated loan size is an indication that activity is more on the higher end of the market. Home-price appreciation growth remains faster than historical averages and inventory, particularly for starter homes, continues to trail strong demand.”
“The 30-year fixed rate decreased to 3.27 percent – its lowest level in four weeks – and helped spur an increase in refinances across all loan types. FHA and VA refinances jumped four percent and 12 percent, respectively,” adds Kan.
The refinance share of mortgage activity increased to 65.2% of total applications from 63.3% the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 3.4% of total applications.
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