Mortgage Applications Suffer Steep Drop

The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications this morning. It noted a decline of 21.6% in the group's seasonally adjusted composite index, compared with a decline of 12.3% for the week ended December 14.

Applications for refinancing fell by 23.3% (seasonally adjusted), the third consecutive decline and the lowest reading since April 2012. The seasonally adjusted purchase applications index decreased by 14.8% from the previous report.

Although the MBA does not offer any commentary in this week's report, the steep drop in applications probably has more to do with the holiday season than anything else. The group did not report unadjusted numbers this week, which could mean that those would make the report look even worse.

The refinancing rate remained unchanged, accounting for 82% of all applications.

The average contract interest rate for a conforming 30-year fixed-rate mortgage increased from 3.51% to 3.52%. The rate for a jumbo 30-year fixed-rate mortgage decreased, from 3.77% to 3.75%. The average interest rate for a 15-year fixed-rate mortgage increased from 2.84% to 2.86%.

The contract interest rate for a 5/1 adjustable rate mortgage increased from 2.66% to 2.65%.

Paul Ausick

Filed under: 24/7 Wall St. Wire, Banking, Housing, Research