Mortgage applications drop for second straight week
The Mortgage Bankers Association reported that applications decreased 1.2% during the week ending Dec. 4 in its latest weekly survey — the second straight week of application decreases.
The refinance index and the unadjusted purchase index did increase, however, jumping 2% and 29% respectively from the previous week. The refinance index is up 89% from the previous year, according to Joel Kan, MBA’s associate vice president of industry and economic forecasting.
“The increase in refinance applications was driven by FHA and VA refinances, while conventional activity fell slightly,” he said. “The purchase market is also poised to finish 2020 on a strong note. Applications fell slightly last week, but were around 3% higher than the two weeks leading up to Thanksgiving. Reversing the recent trend, there was also a shift in the composition of purchase applications, with an increase in government loans pushing the average loan balance lower.”
The refinance share of mortgage activity decreased to 72% of total applications, up from 69.5% the previous week. The adjustable-rate mortgage share of activity also decreased – for the second week in a row – to 1.7%, from 1.8% last week.
The FHA share of total applications increased to 9.9% from 9.1% percent the week prior, while the VA share of total applications increased to 12.7% from 11.9%.
Here is a more detailed breakdown of this week’s mortgage application data:
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 2.9% from 2.92%The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.2% from 3.19%, the second week in a row that jumbo loan balances saw an interest increaseThe average contract interest rate for 30-year fixed-rate mortgages fell to 2.97% from 3%The average contract interest rate for 15-year fixed-rate mortgages decreased to a survey-low 2.51% from 2.53%The average contract interest rate for 5/1 ARMs decreased to 2.60% from 2.63%
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