Mortgage application activity slowed during the week ending Dec. 12, according to data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, was down by 3.8% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index decreased by 5%.
The seasonally adjusted Purchase Index decreased 3% from one week earlier while the unadjusted index was 7% lower – the latter was also 13% higher than the same week one year ago. The Refinance Index decreased 4% from the previous week and was 86% higher than the same week one year ago, while the refinance share of mortgage activity increased to 59.0% of total applications from 58.2% in the previous week.
Among the federal programs, the FHA share of total applications decreased to 19.5% from 20.2% the week prior while the VA share of total applications rose slightly to 16.6% from 16.4% and the USDA share of total applications inched up to 0.4% from 0.3%.
“Mortgage rates inched up last week following the FOMC meeting, as investors interpreted the comments to signal that we are near the end of this rate cutting cycle. As a result, mortgage applications declined slightly,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Purchase application volume typically drops off quickly at the end of the year, and this shifts the mix of the business, with the refinance share reaching 59% last week, the highest level since September. However, refinance activity has remained mostly the same for the past month as rates continue to hold at around the same narrow range.”
