Mortgage application volume fell 5.3% on an adjusted basis during the week ended Dec. 20, as the average rate for a 30-year fixed-rate mortgage increased slightly to 3.99%, up from 3.98%, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
Applications for refinances decreased 5%. Applications for purchases also fell 5%.
Despite the drop in applications for refinances, they were nonetheless up 128% compared with the same week one year earlier.
On an unadjusted basis, total volume decreased 6% compared with the previous week. Applications for purchases were down 7% on an unadjusted basis but were up 5% compared wit the same week a year ago.
“The 10-Year Treasury yield increased last week amid signs of stronger homebuilding activity and solid consumer spending, leading to a rise in conventional conforming and jumbo 30-year mortgage rates to just under four percent,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a release. “Refinance applications for government loans did increase, even though rates on FHA loans picked up. The change in the mix of business has kept the average refinance loan size smaller than we had seen earlier this year.”
The decrease in purchase volume was in keeping with seasonal patterns.
“We are in the slowest time of the year for the purchase market,” Fratantoni adds. “Purchase application activity declined after the seasonal adjustment, but still remains about five percent ahead of last year’s pace. The increase in construction activity will bolster housing inventories, which should be a positive for purchase volumes going into 2020.”
The refinance share of mortgage activity increased to 62.6% of total applications, up from 62.2% the previous week.
The adjustable-rate mortgage (ARM) share of activity fell to 4.1% of total applications.