Mortgage application volume decreased 5.5%, on an adjusted basis, during the week ending Dec. 13, compared to the week prior, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.
On an unadjusted basis, volume decreased 6%.
Refinancing volume fell 4%. However, due to the significant drop in purchase volume, the refinance share of mortgage activity actually increased to 66% of total applications, compared to 65% the previous week.
The seasonally adjusted purchase index, which forecasts incoming application volume, decreased 6% from the week prior to reach its lowest level since December 2012. Â The unadjusted purchase index decreased 9% compared with the previous week and was 12% lower than the same week one year ago.
‘Mortgage applications fell further last week, with the market index falling to its lowest level in more than a dozen years," says Mike Fratantoni, vice president of research and economics for the MBA. "Both purchase and refinance applications fell as interest rates increased going into today's Federal Open Market Committee meeting.’
In addition to the fact that the winter tends to be a slow season for real estate finance, rising interest rates continue to be the main culprit in declining volume.
The average rate for a 30-year fixed-rate mortgage with conforming loan balance ($417,000 or less) increased to 4.62%, compared to 4.61% the week prior, to reach the highest level since September.
The average rate for a 30-year fixed-rate mortgage with jumbo loan balance (greater than $417,000) increased to 4.61%, up from 4.59% the week prior – also the highest since September.
The average rate for a 30-year fixed-rate mortgage backed by the Federal Housing Administration decreased to 4.25% from 4.30%.
The average rate for a 15-year fixed-rate mortgages remained unchanged at 3.66%.
The average rate for 5/1 adjustable rate mortgage (ARM) increased to 3.20% from 3.11%. The ARM share of activity remained unchanged at 8% of total applications.