Mortgage application volume fell 5.0% on an adjusted basis during the week ended December 13, as the average rate for a 30-year fixed-rate mortgage remained flat at 3.98%, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances decreased 7% compared with the previous week while applications for purchases dipped 2%.
The drop in purchase volume was in keeping with seasonal patterns.
Although applications for refinances fell, they were nonetheless 135% higher compared with the same week one year earlier.
On an unadjusted basis, total volume fell 6%. Applications for purchases decreased 6% on an unadjusted basis but were 10% higher compared with the same week last year.
“Mortgage rates were mostly unchanged, even as a potential trade deal between the U.S. and China caused rates to inch forward at the end of last week,” explains Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “With rates showing little meaningful movement, both refinance and purchase activity took a step back.
“As we move into the slowest time of the year for home sales, purchase application volume is declining but continues to outperform year-ago levels, when rates were much higher,” Fratantoni says. “Purchase activity was 10 percent higher than a year ago.”
Fratantoni adds that “2019 was another year of inadequate housing supply in relation to demand.”
“The good news is that the tide could be slowly turning for potential buyers,” he says. “Housing starts and permits rose strongly in November, and homebuilder confidence has surged to a level not seen since 1999.”
The refinance share of mortgage activity fell to 62.2% of total applications, down slightly from 62.4% the previous week.
The adjustable-rate mortgage (ARM) share of activity decreased to 4.6% of total applications.