Despite significantly lower mortgage rates, mortgage application volume decreased 1.5% during the week ended December 15, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
The dip occurred as the average rate for a 30-year fixed-rate mortgage decreased to 6.83%, down from 7.07%.
Applications for refinances decreased 2% from the previous week but were up 18% compared with the same week one year ago.
Applications for purchases decreased 1% compared with the previous week and were down 18% compared with the same week a year ago.
“With the positive news about the drop in inflation, and the FOMC projections proclaiming a pivot towards rate cuts, the 30-year fixed mortgage rate reached its lowest level since June 2023, declining to 6.83 percent,” says Mike Fratantoni, senior vice president and chief economist for MBA, in a statement. “At least as of last week, borrowers’ response to this rate move was rather tepid. VA refinance applications jumped 18 percent for the week, but otherwise, both refinance and purchase applications showed small declines.”
The refinance share of mortgage activity increased to 39.7% of total applications, up from 39.2% the previous week.
The adjustable-rate mortgage (ARM) share of activity remained unchanged at 6.3% of total applications.
Photo: Scott Graham