The mortgage volume summary issued by the Mortgage Bankers Association for the week ended December 15, and the last before its two-week Christmas hiatus, reports one of the worst non-holiday related weeks in a long time. The volume of mortgage applications, as measured by MBA's Market Composite Index, was down significantly from the previous week, and the Purchase Index eked out the smallest year-over-year gain since mid-April.

The Composite Index decreased 4.9 percent on a seasonally adjusted basis compared to the week ended December 8, and was down 6 percent on an unadjusted basis.

The share of applications that were for refinancing increased for the sixth time in the last seven weeks, and was the highest share since December 2016, 53.9 percent.  The previous week's share was 52.4 percent.  The Refinance Index however, declined by 3 percent.

The seasonally adjusted Purchase Index lost 6 percent and the unadjusted version was down 9 percent compared to the prior week, but the unadjusted index was 1 percent higher than during the same week in 2016.

FHA-backed loans received 11.3 percent of all applications, down from 11.8 percent the prior week while the VA share increased to 10.9 percent from 10.3 percent. Applications for USDA mortgages were unchanged at 0.7 percent of the total.

Mortgage interest rates were mixed during the week.  MBA reports that the average contract rate for 30-year fixed-rate mortgages (FRM) with loan balances below the conforming limit of $424,100 decreased to 4.16 percent from 4.20 percent.  Points declined to 0.35 from 0.39 and the effective rate moved lower.

The contract interest rate for jumbo 30-year FRM, loans with balances above the conforming rate, increased to 4.14 percent from 4.11 percent. Points averaged 0.30, up from 0.28 the previous week, and the effective rate was also higher.

Thirty-year FRM backed by the FHA had an average rate of 4.11 percent with 0.41 point. The prior week the rate was 4.13 percent with 0.39 point.  The effective rate decreased.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.60 percent from 3.61 percent.  Points decreased to 0.39 from 0.44, pulling the effective rate lower.

The average contract interest rate for 5/1 adjustable rate mortgages (ARMs) increased to 3.49 percent from 3.42 percent, with points increasing to 0.52 from 0.48, and the effective rate was up. The ARM share of mortgage activity was unchanged at 5.6 percent of total applications.

The MBA said it will report application volume results for the weeks ended December 22 and December 29 on Wednesday, January 3, 2018.

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.