“Mortgage rates inched up last week following the FOMC meeting, as investors interpreted the comments to signal that we are near the end of this rate-cutting cycle. As a result, mortgage applications declined slightly,” said Mike Fratantoni, the MBA’s senior vice president and chief economist.
“Purchase application volume typically drops off quickly at the end of the year, and this shifts the mix of the business, with the refinance share reaching 59% last week, the highest level since September. However, refinance activity has remained mostly the same for the past month as rates continue to hold at around the same narrow range.”
The seasonally adjusted purchase index decreased 3% from one week earlier. The unadjusted purchase index decreased 7% compared with the previous week and was 13% higher than the same week one year ago.
By product type, the adjustable-rate mortgage (ARM) share of activity increased to 7.2% of total applications. The Federal Housing Administration (FHA) share decreased to 19.5%, down from 20.2% the week prior, while the U.S. Department of Veterans Affairs (VA) share increased to 16.6%, up from 16.4% the week prior.
The U.S. Department of Agriculture (USDA) share of applications increased from 0.3% to 0.4% during the week.
The average contract interest rate for 30-year fixed mortgages with conforming loan balances increased by 5 basis points to 6.38%, while rates for 30-year loans with jumbo balances decreased 2 bps to 6.44%.
FHA rates increased 4 bps to 6.12% and 15-year fixed mortgages added 1 bps to average 5.72%. The average contract interest rate for 5/1 ARMs increased 12 bps to 5.63%.
