Following a strong seven-week stretch of increases, mortgage applications fell 1.5% this week, down from last week’s 7.4% rise, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending December 15, 2023.
This week’s numbers:
- 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.
- 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 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% 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.
MBA’s take:
“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.”
