Mortgage Applications Plummet Over Holidays
American consumers shopped over the holidays–but not for mortgages.
Mortgage applications decreased by nearly 30 percent over the past two weeks, the Mortgage Bankers Association reported this morning in its Weekly Mortgage Applications Survey for the weeks ending Jan. 1 and Dec. 25. The results include adjustments for both the New Year’s Day holiday and the Christmas holiday.
The Market Composite Index decreased by 27.0 percent on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the Index decreased by 50 percent compared to two weeks ago.
The Refinance Index decreased by 37 percent from two weeks ago. The refinance share of mortgage activity decreased to 55.4 percent of total applications from 56.1 percent the previous week.
The seasonally adjusted Purchase Index decreased by 15 percent from two weeks earlier. The unadjusted Purchase Index decreased by 40 percent compared to two weeks ago and was 22 percent higher than the same week one year ago.
MBA said while the index changes were calculated relative to two weeks prior, the following compositional and rate measures are presented relative to the previous week only:
The FHA share of total applications increased to 14.6 percent from 13.8 percent the week prior. The VA share of total applications increased to 12.9 percent from 11.6 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.20 percent, its highest level since July, from 4.19 percent, with points decreasing to 0.42 from 0.49 (including origination fee) for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.09 percent from 4.07 percent, with points increasing to 0.35 from 0.34 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by FHA decreased to 3.95 percent from 3.97 percent, with points increasing to 0.41 from 0.34 (including origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 3.47 percent from 3.42 percent, with points increasing to 0.31 from 0.29 (including origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 adjustable-rate mortgages increased to 3.19 percent from 3.13 percent, with points decreasing to 0.32 from 0.52 (including origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The ARM share of activity decreased to 4.7 percent of total applications.
The survey covers more than 75 percent of all U.S. retail and consumer direct residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.
