MBA Weekly Survey Jan. 3: Mortgage Applications Decrease Over Two Weeks
(Image courtesy of Cytonn Photography/Pexels.com)
Mortgage applications decreased 9.4% from two weeks earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Dec. 29, 2023. The results include adjustments to account for the holidays.
The Market Composite Index, a measure of mortgage loan application volume, decreased 9.4% on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the Index decreased 38% compared with two weeks ago. The unadjusted Refinance Index decreased 43% from two weeks ago and was 15% higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 5% compared with two weeks ago. The unadjusted Purchase Index decreased 34% compared with two weeks ago and was 12% lower than the same week one 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. The 30-year fixed mortgage rate edged higher last week and ended 2023 at 6.76%, over a percentage point lower than its recent peak of 7.9% in October 2023,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “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% lower than a year ago. Refinance applications were still at very low levels, but were 15% higher than a year ago.”
Added 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 from 39.4% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.0% of total applications.
The FHA share of total applications decreased to 14.5% from 15.0% the week prior. The VA share of total applications decreased to 14.6% from 17.3% the week prior. The USDA share of total applications increased to 0.5% from 0.4% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.76% from 6.71%, with points increasing to 0.61 from 0.55 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) increased to 6.86% from 6.85%, with points increasing to 0.41 from 0.34 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.51% from 6.50% ,with points increasing to 0.86 from 0.73 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.26% from 6.41%, with points increasing to 0.73 from 0.50 (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 5.71% from 6.26%,with points decreasing to 0.59 from 0.59 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
Mortgage applications 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.
