Mortgage Applications Decrease in December 20th MBA Weekly Survey

Mortgage applications decreased 1.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (“MBA”) Weekly Mortgage Applications Survey for the week ending December 15, 2023. 

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week and was 18 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 18 percent 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 percent,” 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 percent for the week, but otherwise, both refinance and purchase applications showed small declines.”

The refinance share of mortgage activity increased to 39.7 percent of total applications from 39.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 6.3 percent of total applications.

The FHA share of total applications decreased to 15.5 percent from 16.1 percent the week prior. The VA share of total applications increased to 15.6 percent from 14.2 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent 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 percent from 7.07 percent, with points increasing to 0.60 from 0.59 (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 7.12 percent from 7.22 percent, with points increasing to 0.55 from 0.37 (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 6.65 percent from 6.84 percent, with points decreasing to 0.69 from 0.72 (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 6.41 percent from 6.67 percent, with points increasing to 0.77 from 0.58 (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 6.33 percent from 6.47 percent, with points decreasing to 0.57 from 0.76 (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