Mortgage applications decreased 13.2% from two weeks ago, according to Market Composite Index data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 30.
On an unadjusted basis, the index decreased 39.4% compared with two weeks ago. The holiday-adjusted Refinance Index decreased 16.3% from two weeks ago and was 87% lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 12.2% from two weeks earlier. The unadjusted Purchase Index decreased 38.5% compared with two weeks ago and was 42% lower than the same week one year ago.
“The end of the year is typically a slower time for the housing market, and with mortgage rates still well above 6 percent and the threat of a recession looming, mortgage applications continued to decline over the past two weeks to the lowest level since 1996,” says Joel Kan, MBA’s vice president and deputy chief economist. “Purchase applications have been impacted by slowing home sales in both the new and existing segments of the market. Even as home-price growth slows in many parts of the country, elevated mortgage rates continue to put a strain on affordability and are keeping prospective homebuyers out of the market.”
“Refinance applications remain less than a third of the market and were 87 percent lower than a year ago as rates remained close to double what they were in 2021,” adds Kan. “Mortgage rates are lower than October 2022 highs, but would have to decline substantially to generate additional refinance activity.”
While the index changes were calculated relative to two weeks prior, the following compositional and rate measures are presented relative to the previous week only.
The refinance share of mortgage activity increased to 30.3% of total applications from 28.8% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.3% of total applications.
The FHA share of total applications increased to 14.0% from 13.1% the week prior. The VA share of total applications increased to 13.4% from 12.0% the week prior. The USDA share of total applications remained unchanged at 0.6%.
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