Mortgage Applications Decrease in Final Two Weeks of the Year

January 3, 2013

Mortgage application volume decreased substantially during the final two weeks of 2012, according to the Mortgage Bankers Association’s weekly mortgage application survey.

Mortgage applications for the week ending Dec. 28 decreased 21.6 percent from the week ending Dec. 14, 2012 (two weeks prior), according to the survey. The results include an adjustment to account for the Christmas holiday.

The Refinance Index decreased 23.3 percent compared to the week ending December 14, 2012. The refinance index fell for three consecutive weeks, with the week ending December 28, 2012 at the lowest level since April 2012. The seasonally adjusted Purchase Index decreased 14.8 percent compared with levels reported two weeks ago.

The refinance share of mortgage activity remained the same at 82 percent of total applications for the two weeks.

For the week ending 12/28/12, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.52 percent from 3.51 percent, with points increasing to 0.48 from 0.45 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from the previous week.

For the week ending 12/28/12, the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 3.75 percent from 3.77 percent, with points decreasing to 0.30 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from the previous week.

For the week ending 12/28/12, the average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.34 percent from 3.35 percent, with points increasing to 0.61 from 0.58 (including the origination fee) for 80 percent LTV loans. The effective rate increased from the previous week.

For the week ending 12/28/12, the average contract interest rate for 15-year fixed-rate mortgages increased to 2.86 percent from 2.84 percent, with points increasing to 0.27 from 0.21 (including the origination fee) for 80 percent LTV loans. The effective rate increased from the previous week.

For the week ending 12/28/12, the average contract interest rate for 5/1 ARMs decreased to 2.65 percent from 2.66 percent, with points increasing to 0.42 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate increased from the previous week.