MBA Weekly Survey Dec. 20: Mortgage Applications Decrease

(Image courtesy of Cytonn Photography/Pexels.com)

Mortgage applications decreased 1.5% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Dec. 15, 2023. 

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.5% on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 3% compared with the previous week. The Refinance Index decreased 2% from the previous week and was 18% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 1% from one week earlier. The unadjusted Purchase Index decreased 4% compared with the previous week and was 18% lower than the same week one 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%,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “At least as of last week, borrowers’ response to this rate move was rather tepid. VA refinance applications jumped 18% 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 from 39.2% the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 6.3% of total applications.

The FHA share of total applications decreased to 15.5% from 16.1% the week prior. The VA share of total applications increased to 15.6% from 14.2% the week prior. The USDA share of total applications remained unchanged at 0.4% from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.83% from 7.07%, with points increasing to 0.60 from 0.59 (including the origination fee) for 80% loan-to-value ratio (LTV) 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 $726,200) decreased to 7.12% from 7.22%, with points increasing to 0.55 from 0.37 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.65% from 6.84%, with points decreasing to 0.69 from 0.72 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.41% from 6.67%, with points increasing to 0.77 from 0.58 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 6.33% from 6.47%, with points decreasing to 0.57 from 0.76 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week.

Please Note:

MBA Offices will be closed Monday, Dec. 25, 2023 and will reopen on Tuesday, Jan. 2, 2024.   Due to the holiday, the results for weeks ending Dec. 22, 2023 and Dec. 29, 2023 will both be released on Jan. 3, 2024.

If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visit www.mba.org/WeeklyApps, contact mbaresearch@mba.org or click here.

The survey covers over 75% of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.