Ahead of the Christmas holiday break, fewer prospective homebuyers were filling out mortgage applications, according to from the Mortgage Bankers Association (MBA) for the week ending Dec. 19.
The Market Composite Index, the MBA’s measure of mortgage loan application volume, decreased 5% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index was down by 6%.
The seasonally adjusted Purchase Index dropped 4% from one week earlier and the unadjusted index was 6% lower – the latter was also 16% higher than the same week one year ago. The Refinance Index fell by 6% from the previous week and was 110% higher than the same week one year ago, although the refinance share of mortgage activity inched up slightly to 59.1% of total applications from 59.0% in the previous week.
Among the federal programs, the FHA share of total applications increased to 20.8% from 19.5% the week prior while the VA share of total applications decreased to 15.3% from 16.6% and the USDA share of total applications remained unchanged at 0.4%.
“Overall mortgage application volume fell last week, despite the slight decline in mortgage rates,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “MBA expects the trends of a softening job market, sticky inflation, elevated home inventories, and steady mortgage rates will persist into the new year. Purchase application volume last week was 16% higher than a year earlier. We are forecasting continued, modest growth in terms of home sales in 2026.”
