Total mortgage application volume fell 3.8% last week, as rates increased, according to the Mortgage Bankers Association’s (MBA) Weekly Applications Survey.
For the week ended December 12, applications for refinances decreased 4% compared with the previous week but were up 86% compared with the same week one year ago.
Applications for purchases decreased 3% compared with the previous week but were up 13% compared with the same week one year ago.
“Mortgage rates inched up last week following the FOMC meeting, as investors interpreted the comments to signal that we are near the end of this rate cutting cycle,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “As a result, mortgage applications declined slightly.”
The drop in purchase applications was in keeping with seasonal patterns.
“Purchase application volume typically drops off quickly at the end of the year, and this shifts the mix of the business, with the refinance share reaching 59 percent last week, the highest level since September,” Fratantoni says. “However, refinance activity has remained mostly the same for the past month as rates continue to hold at around the same narrow range.”
Due to the drop in purchase volume, the refinance share of mortgage activity increased to 59.0% of total applications, up from 58.2% the previous week.
The adjustable-rate mortgage (ARM) share of activity increased to 7.2% of total applications.
The average contract interest rate for a 30-year fixed-rate mortgage with conforming loan balance was 6.38%, up from 6.33%.