Refinance demand fell for the sixth straight week, indicating an end to the boom that began in early 2009, according to the latest survey from the Mortgage Bankers Association.
Overall, mortgage application volume was off 18.6 percent on a seasonally adjusted basis during the week ending December 17.
On an unadjusted basis, it was 20.0 percent lower than one week earlier.
The refinance index plummeted 24.6 percent to its lowest level since April 30, while the seasonally adjusted purchase mortgage index decreased 2.5 percent.
The unadjusted purchase index was off 4.9 percent compared with the previous week and 8.4 percent lower than the same week a year ago.
“Refinance application volume dropped sharply this week as mortgage rates held near six month highs,” said Michael Fratantoni, MBA’s Vice President of Research and Economics, in a release.
“Purchase applications fell for a second week, with the level of applications little changed over the past month, indicating that home sales are likely to remain relatively weak over the next few months.”
Meanwhile, mortgage rates were little changed, with the popular 30-year fixed-rate mortgage averaging 4.85 percent, up from 4.84 percent a week earlier.
The 15-year fixed climbed to 4.22 percent from 4.21 percent, and the MBA no longer tracks the one-year adjustable-rate mortgage, which fell out of favor with borrowers long ago.
The mortgage rates above are good for mortgages at 80 percent loan-to-value – but pricing adjustments can lower or raise your actual interest rate.
Keep in mind the MBA’s weekly survey covers more than half of all retail, residential loan applications, but does not factor out duplicate or rejected apps, which have surely risen since the mortgage crisis got underway a few years back.
About the Author: Colin Robertson
Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for 15 years.