Mortgage application activity for the last two weeks of 2023 was down, according to new data from the Mortgage Bankers Association (MBA) for the week ending Dec. 29.
The Market Composite Index, the MBA’s measure of mortgage loan application volume, decreased 9.4% on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the index fell by 38%.
The seasonally adjusted Purchase Index was 5% lower compared with two weeks ago while the unadjusted index dropped 34% – the latter was also 12% lower than the same week one year ago.
The holiday adjusted Refinance Index decreased 18% from two weeks ago and the unadjusted index decreased 43%; both measures were 15% higher than the same week one year ago and the refinance share of mortgage activity dipped to 36.3% of total applications from 39.4% in the previous week.
Among the federal programs, the FHA share of total applications decreased to 14.5% from 15% while the VA share of total applications decreased to 14.6% from 17.3% and the USDA share of total applications inched up to 0.5% from 0.4%.
Joel Kan, MBA’s vice president and deputy chief economist, observed, “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% lower than a year ago. Refinance applications were still at very low levels but were 15% higher than a year ago. 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.”
