Mortgage Applications Decrease Over Holidays

New applications for residential loans took a turn for the worse during the holidays, though purchase-money activity mostly held up compared to a year previous.

The seasonally adjusted Market Composite Index for the week ended Dec. 30, 2016, moved down 12 percent from two weeks earlier, the last time it was reported.

Foregoing any adjustments for seasonal factors, the index — which is a measure of mortgage loan application volume — plummeted 48 percent from the last report.

The Mortgage Bankers Association produces the index based on its Weekly Mortgage Applications Survey, which it says covers more than 75 percent of all retail residential loan applications.

MBA reported that refinance applications were down 22 percent from the week ended Dec. 16, 2016. Refinance share, meanwhile, widened to 52.2 percent from 51.8 percent the prior week. But the share thinned from 55.4 percent a year prior.

The decline from two weeks prior for the seasonally adjusted Purchase Index was just 2 percent. But without seasonal adjustments, purchase applications sank 41 percent and were off a percent from the week ended Jan. 1, 2016.

Applications for mortgages insured by the Federal Housing Administration made up 11.6 percent of all applications, more than 10.7 percent the previous week. FHA share was 14.6 percent the same week a year previous.

Another 12.3 percent of the latest week’s business was for loans guaranteed by the Department of Veterans Affairs. VA share was more narrow than 12.4 percent the previous week and 12.9 percent the same week in 2016.

Interest rates on jumbo mortgages were 2 basis points less than conforming rates. One week earlier, the jumbo-conforming spread was a negative 4 BPS, while it was a negative 11 BPS one year earlier.

MBA reported that applications for adjustable-rate mortgages accounted for 5.4 percent of total activity, down from 6.5 percent a week previous. A year previous, ARM share was 4.7 percent.

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