Mortgage application activity declined for the week ending Dec. 15, according to new data from the Mortgage Bankers Association (MBA).
The Market Composite Index, the MBA’s measure of mortgage loan application volume, fell by 1.5% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index was down by 3%.
The seasonally adjusted Purchase Index decreased 1% from one week earlier while the unadjusted index took a 4% drop from the previous week and was 18% lower than the same week one year ago.
The Refinance Index decreased 2% from the previous week, although it was 18% higher than the same week one year ago. The refinance share of mortgage activity increased slightly to 39.7% of total applications from 39.2% in the previous week.
Among the federal programs, the FHA share of total applications decreased to 15.5% from 16.1% while the VA share of total applications increased to 15.6% from 14.2% and USDA share of total applications remained unchanged at 0.4%.
“With the positive news about the drop in inflation, and the FOMC projections proclaiming a pivot towards rate cuts, the 30-year fixed mortgage rate reached its lowest level since June 2023, declining to 6.83%,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “At least as of last week, borrowers’ response to this rate move was rather tepid. VA refinance applications jumped 18% for the week, but otherwise, both refinance and purchase applications showed small declines.”
