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As is always expected, mortgage applications activity for the last two full weeks of 2012 fell dramatically.  The Mortgage Bankers Association (MBA), after a one week hiatus for the Christmas holiday released data from its Weekly Mortgage Applications Survey for the two weekly reporting periods ended December 21 and December 28.  The MBA's Market Composite Index, a measure of mortgage application volume, fell 21.6 percent on a seasonally adjusted basis from the pre-holiday period ended December 14.  MBA did not release any non-seasonally adjusted data.   

 The Refinance Index decreased 23.3 percent compared to the week ending December 14. The refinance index fell for three consecutive weeks, with the week ending December 28, 2012 at the lowest level since April 2012 but refinancing held its market share at 82 percent, the same as during the last pre-holiday week. The seasonally adjusted Purchase Index decreased 14.8 percent compared with levels reported two weeks ago.

Purchase Index vs 30 Yr Fixed

Refinance Index vs 30 Yr Fixed

MBA released mortgage interest rates for the last week of the two week period (December 28) and they were mixed.  The average contract interest rate for 30-year fixed-rate mortgages (FRM) with conforming loan balances of $417,500 or less increased one basis point to 3.52 percent with points moving to 0.48 from 0.45.  The effective rate increased from the previous week.  The jumbo version of the 30-year FRM (balances over $417,500) had an average contract rate of 3.75 percent with 0.30 point compared to 3.77 percent with 0.32 point and the effective rate decreased from the previous week.

Thirty-year FRM backed by the FHA had an average contract rate of 3.34 percent, down from 3.35 percent while points increased from 0.58 to 0.61.  The effective rate increased from the previous week.

For the week ended December 28 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 and the effective rate increased.  The 5/1 adjustable rate mortgage (ARM) had a contract rate of 2.65 percent with 0.42 point compared to 2.66 percent with 0.33 point and the effective rate also increased.

MBA's survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Rates quoted are for loans with a loan to value ratio of 80 percent and points include the applications fee.  Base period and value for all indexes is March 16, 1990=100.

More from MND:

• MBS Commentary: MBS RECAP: Apocalyptic Catalogue of Reprice Alerts
• Mortgage Rate Watch: Mortgage Rates Annihilated; Brief History of All-Time Lows
• MBS Commentary: MBS SPECIAL ALERT: Bernanke Confirms Stabled Stallion
• MBS Commentary: Differences Between Past and Current FOMC Statements
• MBS Commentary: MBS MID-DAY: Yesterday's Gains Erased Ahead of Fed

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