Mortgage applications decreased 4% from one week earlier, according to data from the Mortgage Bankers Association‘s (MBA) Weekly Mortgage Applications Survey for the week ending December 10.
The market composite index, a measure of mortgage loan application volume, decreased 4% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index decreased 6% compared with the previous week. The refinance index decreased 6% from the previous week and was 41% lower than the same week one year ago. The seasonally adjusted purchase index increased 1% from one week earlier. The unadjusted purchase index decreased 4% compared with the previous week and was 9% lower than the same week one year ago.
“Applications to refinance fell over the week, despite the 30-year fixed rate remaining at 3.30 percent. With rates more than 40 basis points higher than last year, applications were down 41 percent on an annual basis. Fewer homeowners have a strong incentive to refinance at current rates,” mentions Joel Kan, MBA’s associate vice president of economic and industry forecasting.
“Purchase activity increased slightly, as a 1.7 percent rise in conventional applications offset a 1.6 percent decline in applications for government loans,” adds Kan. “The strength in conventional purchase activity continues to support higher loan balances, which moved back over $400,000. Housing demand remains strong as the year comes to an end amidst tight inventory and steep home-price growth.”
The refinance share of mortgage activity decreased to 63.3% of total applications from 63.9% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.4% of total applications.
The FHA share of total applications decreased to 9.6% from 9.9% the week prior. The VA share of total applications decreased to 10.6% from 10.7% the week prior. The USDA share of total applications remained unchanged from 0.5% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) remained unchanged at 3.30%, with points remaining unchanged at 0.39 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.32% from 3.33%, with points remaining unchanged at 0.30 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.37% from 3.35%, with points increasing to 0.34 from 0.32 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.58% from 2.62%, with points increasing to 0.34 from 0.31 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs decreased to 2.75% from 2.98%, with points increasing to 0.28 from 0.21 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
Image: “Magnetic Poetry – Investment Property Financing: Mortgage or Cash” by rentalrealities is licensed under CC BY 2.0
