The Mortgage Bankers Association (MBA) closed its offices for the year-end holidays, so today's report on mortgage applications for the week ended December 29, 2017 covers changes since the Association's report for the week ended December 15. The data includes adjustments to account for the Christmas holiday.

MBA's Market Composite Index, a measure of mortgage loan application volume, decreased 2.8 percent on a seasonally adjusted basis compared to that from two weeks earlier, and was down 42 percent on an unadjusted basis compared to the pre-holiday week.  The seasonally adjusted Purchase Index gained 1 percent, but was down 40 percent on an unadjusted basis. Despite that plunge it remained 3 percent higher than during the same week in 2016.  The Refinance Index decreased by 7 percent from the last reported level.

 

Refi Index vs 30yr Fixed

 

 

Purchase Index vs 30yr Fixed

 

 

MBA did report the share of applications for each of the previous two weeks that were accounted for by various loan products and types.  During the week ended December 22 the share of total applications that went to refinancing was 51.8 percent compared to 53.8 percent in the pre-holiday report.  Last week the share increased to 52.0 percent.

The FHA share of total applications increased to 10.4 percent from 10.3 percent the prior week and the VA share rose to 11.2 percent from 10.6 percent.  USDA loans accounted for 0.8 percent in the most recent week, compared to 0.7 percent the week before.

The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $424,100 or less was unchanged from the week prior at 4.25 percent. Points increased to 0.36 from 0.35, and the effective rate was slightly higher.

The average contract interest rate for 30-year FRM with jumbo loan balances above $424,100, decreased 8 basis points to 4.13 percent.  Points ticked up to 0.21 from 0.20 and the effective rate declined. 

Thirty-year FRM backed by the FHA had an average contract rate of 4.17 percent with 0.40 point.  The previous week the rate was 4.15 percent with 0.37 point.  The effective rate increased.

The rate for 15-year FRM averaged 3.65 percent, down from 3.66 percent. Points dipped to 0.34 from 0.37, leading to a lower effective rate.  

The adjustable-rate mortgage (ARM) share of loan applications decreased to 5.3 percent during the week, even though the average contract interest rate for the 5/1 version saw a significant decrease. That rate dropped 16 basis points to 3.40 percent with points rising to 0.73 from 0.46. The effective rate declined from the prior week. 

MBA's Weekly Mortgage Applications Survey has been conducted since 1990 and covers over 75 percent of all U.S. retail residential mortgage applications.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100 and interest rate information is based on loans with an 80 percent loan-to-value ratio and points that include the origination fee.