Mortgage applications decreased 9.4% during the two-week period ended December 29, as rates began to edge back up, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
The 30-year fixed mortgage rate rose last week and ended 2023 at 6.76%.
Despite the increase, the 30-year is still down significantly from the recent peak of 7.9% in October.
The results include adjustments to account for the holidays.
Applications for refinances decreased 18% during the two-week period and were down 43% compared with the same two weeks a year ago.
Applications for purchases decreased 5% during the two-week period and were down 12% compared with a year ago.
“Markets continued to digest the impact of slowing inflation and potential rate cuts from the Federal Reserve, helping mortgage rates to stay at levels close to the lowest since mid-2023,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “The 30-year fixed mortgage rate edged higher last week and ended 2023 at 6.76 percent, over a percentage point lower than its recent peak of 7.9 percent in October 2023. The recent decline in rates has given the housing market some cause for optimism going into 2024, but purchase applications have not yet picked up in response, with the overall level of purchase activity 12 percent lower than a year ago. Refinance applications were still at very low levels but were 15 percent higher than a year ago.”
Adds Kan, “The housing market has been hampered by a limited supply of homes for sale, but the recent strength in new residential construction will continue to help ease inventory shortages in the months in come.”
The refinance share of mortgage activity decreased to 36.3% of total applications, down from 39.4% the previous week.
The adjustable-rate mortgage (ARM) share of activity decreased to 6.0% of total applications.
Photo: Kaleb Tapp