Mortgage Applications Increase in December 13th MBA Weekly Survey

Mortgage applications increased 7.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 8, 2023. 

The Market Composite Index, a measure of mortgage loan application volume, increased 7.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6 percent compared with the previous week. The Refinance Index increased 19 percent from the previous week and was 27 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 18 percent lower than the same week one year ago.

“Mortgage rates dropped last week, as incoming data point to a slowing economy and support a pivot by the Federal Reserve to begin cutting rates next year. The average 30-year fixed mortgage rate declined to 7.07 percent, the lowest level since July,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Borrowers who had seen rates near 8 percent earlier this fall are now seeing some lenders quote rates below 7 percent. Refinance volume picked up in response to this drop in rates, with a particularly notable increase for FHA and VA refinance applications. Purchase volume was running about 18 percent below last year’s pace, as prospective homebuyers are still challenged by a lack of inventory, even as rates have decreased.”

The refinance share of mortgage activity increased to 39.2 percent of total applications from 34.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.3 percent of total applications.

The FHA share of total applications increased to 16.1 percent from 15.0 percent the week prior. The VA share of total applications increased to 14.2 percent from 12.8 percent the week prior. The USDA share of total applications decreased to 0.4 percent from 0.5 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.07 percent from 7.17 percent, with points decreasing to 0.59 from 0.60 (including the origination fee) for 80 percent 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 7.22 percent from 7.35 percent, with points decreasing to 0.37 from 0.44 (including the origination fee) for 80 percent 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 6.84 percent from 6.98 percent, with points decreasing to 0.72 from 0.84 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.67 percent from 6.80 percent, with points decreasing to 0.58 from 0.77 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 6.47 percent from 6.58 percent, with points increasing to 0.76 from 0.69 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

Please Note:

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

The survey covers over 75 percent 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.

Contact:

Falen Taylor – Media Contact – ftaylor@mba.org – (202) 557-2771

Source: Mortgage Bankers Association