Mortgage Applications Decrease in December 9th MBA Weekly Survey

Mortgage applications decreased 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 4, 2020. The previous week’s results included an adjustment for the Thanksgiving holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 40 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week and was 89 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index increased 29 percent compared with the previous week and was 22 percent higher than the same week one year ago.

“Refinance activity increased last week in response to mortgage rates for 30-year, 15-year, and FHA loans hitting their lowest levels in MBA’s survey. The increase in refinance applications was driven by FHA and VA refinances, while conventional activity fell slightly. The ongoing refinance wave has continued through the fall, with activity last week up 89 percent from a year ago,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The purchase market is also poised to finish 2020 on a strong note. Applications fell slightly last week but were around 3 percent 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 increased to 72.0 percent of total applications from 69.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 1.7 percent of total applications.   The FHA share of total applications increased to 9.9 percent from 9.1 percent the week prior. The VA share of total applications increased to 12.7 percent from 11.9 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to a survey low of 2.90 percent from 2.92 percent, with points increasing to 0.35 from  0.31 (including the origination fee) for 80 percent 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 $510,400) increased to 3.20 percent from 3.19 percent, with points decreasing to 0.28 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to a survey low of 2.97 percent from 3.00 percent, with points increasing to 0.40 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to a survey low of 2.51 percent from 2.53 percent, with points increasing to 0.35 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.60 percent from 2.63 percent, with points decreasing to 0.40 from 0.47 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.

Contact:

Adam DeSanctis – Media Contact – adesanctis@mba.org – (202) 557-2727

Source: Mortgage Bankers Association