Mortgage Applications take Holiday Break, Falling 21.6%

by devteam January 3rd, 2013 | Share

As is always expected, mortgage applications</aactivity for the last two full weeks of 2012 fell dramatically.  The Mortgage Bankers Association (MBA), afterrna one week hiatus for the Christmas holiday released data from its WeeklyrnMortgage Applications Survey for the two weekly reporting periods endedrnDecember 21 and December 28.  The MBA’srnMarket Composite Index, a measure of mortgage application volume, fell 21.6rnpercent on a seasonally adjusted basis from the pre-holiday period endedrnDecember 14.  MBA did not release any non-seasonallyrnadjusted data.   </p

 ThernRefinance Index decreased 23.3 percent compared to the week ending December 14.rnThe refinance index fell for three consecutive weeks, with the week endingrnDecember 28, 2012 at the lowest level since April 2012 but refinancing held itsrnmarket share at 82 percent, the same as during the last pre-holiday week. Thernseasonally adjusted Purchase Index decreased 14.8 percent compared with levelsrnreported two weeks ago.</p

Purchase Index vs 30 Yr Fixed</b</p

ChartManager.loadChart(‘purchaseappschart’, ‘PurchaseMtgAppChart’);


Refinance Index vs 30 Yr Fixed</p

ChartManager.loadChart(‘refiappschart’, ‘RefiMtgAppChart’);


MBArnreleased mortgage interest rates for the last week of the two week periodrn(December 28) and they were mixed.  Thernaverage contract interest rate for 30-year fixed-rate mortgages (FRM) withrnconforming loan balances of $417,500 or less increased one basis point to 3.52rnpercent with points moving to 0.48 from 0.45. rnThe effective rate increased from the previous week.  The jumbo version of the 30-year FRMrn(balances over $417,500) had an average contract rate of 3.75 percent with 0.30rnpoint compared to 3.77 percent with 0.32 point and the effective rate decreasedrnfrom the previous week.rn</p

Thirty-yearrnFRM backed by the FHA had an average contract rate of 3.34 percent, down fromrn3.35 percent while points increased from 0.58 to 0.61.  The effective rate increased from thernprevious week.</p

For the week ended December 28 the average contractrninterest rate for 15-year fixed-rate mortgages increased to 2.86 percent fromrn2.84 percent, with points increasing to 0.27 from 0.21 and the effective rate increased.  The 5/1 adjustable rate mortgage (ARM) had arncontract rate of 2.65 percent with 0.42 point compared to 2.66 percent withrn0.33 point and the effective rate also increased.</p

MBA’s survey covers over 75 percent of all U.S. retailrnresidential mortgage applications, and has been conducted weekly sincern1990.  Respondents include mortgage bankers, commercial banks andrnthrifts.  Rates quoted are for loans with a loan to value ratio of 80rnpercent and points include the applications fee.  Base period and value for all indexes isrnMarch 16, 1990=100.</p


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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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