MBA: Mortgage Application Volume Jumped Ahead Of Fed Rate Hike

Mortgage application volume jumped 7.3% on an adjusted basis during the week ended Dec. 18 due mainly to a last-minute push from borrowers seeking to lock in low mortgage rates prior to the Federal Reserve’s announcement on Dec. 16 that it would be raising short-term interest rates, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.

Applications for refinances increased 11%, while applications for purchases increased 4%.

The increase follows a 1.1% decrease the previous week.

On an unadjusted basis, total volume increased 7%. Applications for purchases increased 2% compared with the previous week and increased 37% compared with the same week one year ago.

The refinance share of mortgage activity increased to 62.8% of total applications from 60.7% the previous week.

Mortgage rates ticked up slightly. The average rate for a 30-year, fixed-rate mortgage (FRM) with conforming loan balance ($417,000 or less) was 4.16%, up from 4.14%.

The average rate for a 30-year FRM with jumbo loan balance (greater than $417,000) was 4.04%, up from 4.01%.

The average rate for a 30-year FRM backed by the Federal Housing Administration (FHA) was 3.92%, up from 3.90%.

The average rate for a 15-year FRM was 3.45%, up from 3.38%.

The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.24%, down from 3.25%.

The ARM share of activity increased to 6.1% of total applications.

Looking at volume by loan type, the FHA share was 12.9% of all applications – down from 14.0% the previous week. The Veterans Affairs share was 10.5%, down from 11.2% the week prior. The U.S. Department of Agriculture share of total applications was 0.6%, unchanged from the previous week.

All rates are based on closings. The survey covers about 75% of the U.S. mortgage market.


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