Mortgage Applications Surge Following Steady Rate Decreases


In the wake of a six-week stretch of mortgage rate decreases, Mortgage applications surged 7.4% this week, also marking their sixth week of increases, up from last week’s 2.4% rise, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending December 8, 2023.

This week’s numbers: 

  • The Market Composite Index, a measure of mortgage loan application volume, increased 7.4% on a seasonally adjusted basis from one week earlier. 
  • On an unadjusted basis, the Index increased 6% compared with the previous week. 
  • The Refinance Index increased 19% from the previous week and was 27% higher than the same week one year ago. 
  • The seasonally adjusted Purchase Index increased 4% from one week earlier. The unadjusted Purchase Index decreased 1% compared with the previous week and was 18% lower than the same week one year ago.
  • The refinance share of mortgage activity increased to 39.2% of total applications from 34.7% the previous week.
  • The adjustable-rate mortgage (ARM) share of activity decreased to 6.3% of total applications.
  • The FHA share of total applications increased to 16.1% from 15.0% the week prior. 
  • The VA share of total applications increased to 14.2% from 12.8% the week prior. 
  • The USDA share of total applications decreased to 0.4% from 0.5% the week prior.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.07% from 7.17%, with points decreasing to 0.59 from 0.60 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) decreased to 7.22% from 7.35%, with points decreasing to 0.37 from 0.44 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
  • The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.84% from 6.98%, with points decreasing to 0.72 from 0.84 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week.
  • The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.67% from 6.80%, with points decreasing to 0.58 from 0.77 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
  • The average contract interest rate for 5/1 ARMs decreased to 6.47% from 6.58%, with points increasing to 0.76 from 0.69 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

MBA’s take:

“Mortgage rates dropped last week, as incoming data point to a slowing economy and support a pivot by the Federal Reserve to begin cutting rates next year. The average 30-year fixed mortgage rate declined to 7.07%, the lowest level since July,” said Mike Fratantoni, MBA’s SVP and chief economist. “Borrowers who had seen rates near 8% earlier this fall are now seeing some lenders quote rates below 7%. Refinance volume picked up in response to this drop in rates, with a particularly notable increase for FHA and VA refinance applications. Purchase volume was running about 18% below last year’s pace, as prospective homebuyers are still challenged by a lack of inventory, even as rates have decreased.”





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