Continuing declines in interest rates contributed to a substantial increase in applications for refinancing heading into the holiday season. This pushed the overall application volume fractionally higher. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, increased 0.9 percent on a seasonally adjusted basis during the week ended December 16. However, it slipped by 1 percent on an unadjusted basis compared with the previous week.  The Refinance Index increased 6 percent from the previous week but was 85 percent lower than the same week one year ago. The refinance share of mortgage activity increased to 31.3 percent of total applications from 29.4 percent the previous week. [refiappschart] The seasonally adjusted Purchase Index decreased by 0.1 percent from one week earlier, and the unadjusted version was down 3 percent week-over-week and was 36 percent lower than the same week in 2021. [purchaseappschart] “The Federal Reserve raised its short-term rate target last week, but longer-term rates, including mortgage rates, declined for the week, with the 30-year conforming rate reaching 6.34 percent – its lowest level since September,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Refinance application volume increased slightly in response but was still about 85 percent below year-ago levels. This is a particularly slow time of year for homebuying, so it is not surprising that purchase applications did not move much in response to lower mortgage rates.”

Published On: December 21, 2022 / Categories: Mortgage News /