Mortgage applications drop for second straight week

The Mortgage Bankers Association reported that applications decreased 1.2% during the week ending Dec. 4 in its latest weekly survey — the second straight week of application decreases.

The refinance index and the unadjusted purchase index did increase, however, jumping 2% and 29% respectively from the previous week. The refinance index is up 89% from the previous year, according to Joel Kan, MBA’s associate vice president of industry and economic forecasting.

“The increase in refinance applications was driven by FHA and VA refinances, while conventional activity fell slightly,” he said. “The purchase market is also poised to finish 2020 on a strong note. Applications fell slightly last week, but were around 3% higher than the two weeks leading up to Thanksgiving. Reversing the recent trend, there was also a shift in the composition of purchase applications, with an increase in government loans pushing the average loan balance lower.” 

The refinance share of mortgage activity decreased to 72% of total applications, up from 69.5% the previous week. The adjustable-rate mortgage share of activity also decreased – for the second week in a row – to 1.7%, from 1.8% last week.

The FHA share of total applications increased to 9.9% from 9.1% percent the week prior, while the VA share of total applications increased to 12.7% from 11.9%.

Here is a more detailed breakdown of this week’s mortgage application data:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 2.9% from 2.92%
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.2% from 3.19%, the second week in a row that jumbo loan balances saw an interest increase
  • The average contract interest rate for 30-year fixed-rate mortgages fell to 2.97% from 3%
  • The average contract interest rate for 15-year fixed-rate mortgages decreased to a survey-low 2.51% from 2.53%
  • The average contract interest rate for 5/1 ARMs decreased to 2.60% from 2.63%

Source: housingwire.com

Average 30-year mortgage rate for purchase loans falls to another all-time low – HousingWire

The average U.S. mortgage rate for a 30-year fixed loan fell to 2.81% this week, the lowest in Freddie Mac’s survey history, the mortgage giant said in a report on Thursday. The rate fell six basis points from the week prior and is now five basis points lower than the original all-time low set in mid-September.

The average fixed rate for a 15-year mortgage was 2.35%, falling from last week’s 2.37% — matching the record set three weeks ago.

There have now been 12 consecutive weeks when average mortgage rates have been below 3% and this is the tenth record broken this year, said Sam Khater, Freddie Mac’s chief economist.

“Low mortgage rates have become a regular occurrence in the current environment,” Khater said. “Many people are benefitting as refinance activity remains strong. However, it’s important to remember that not all people are able to take advantage of low rates given the effects of the pandemic.”


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Although mortgage applications fell seven basis points last week, purchase applications have now boasted 21 weeks of year-over-year gains.

In September, the Federal Reserve predicted that rates will remain low through 2023.

Source: housingwire.com