Mortgage Applications Decreased Over Two-Week Period, Reported in January 3rd MBA Weekly Survey

Mortgage applications decreased 9.4 percent from two weeks earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 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 percent on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the Index decreased 38 percent compared with two weeks ago. The holiday adjusted Refinance Index decreased 18 percent from two weeks ago and the unadjusted Refinance Index decreased 43 percent from two weeks ago; both measures were 15 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent compared with two weeks ago. The unadjusted Purchase Index decreased 34 percent compared with two weeks ago and was 12 percent 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 percent, over a percentage point lower than its recent peak of 7.9 percent 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 percent lower than a year ago. Refinance applications were still at very low levels, but were 15 percent 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 percent of total applications from 39.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.0 percent of total applications.

The FHA share of total applications decreased to 14.5 percent from 15.0 percent the week prior. The VA share of total applications decreased to 14.6 percent from 17.3 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent 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 percent from 6.71 percent, with points increasing to 0.61 from 0.55 (including the origination fee) for 80 percent 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 percent from 6.85 percent, with points increasing to 0.41 from 0.34 (including the 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 the FHA increased to 6.51 percent from 6.50 percent, with points increasing to 0.86 from 0.73 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.26 percent from 6.41 percent, with points increasing to 0.73 from 0.50 (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 5.71 percent from 6.26 percent, with points decreasing to 0.59 from 0.59 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week. 

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