While November saw a nearly 1 percent drop in mortgage rates, the past four weeks have seen applications decrease overall more than 10 percent, according to the Mortgage Bankers Association.
Mortgage applications of all types for the week ending Dec. 2 decreased 1.9 percent on a seasonally adjusted basis from one week earlier, the MBA said in a statement. On an unadjusted basis, the MBA’s weekly mortgage tracker showed an increase of 36 percent compared with the previous week. The previous week ending Nov. 25 also included an adjustment for the Thanksgiving holiday.
While mortgage demand historically drops off in the fall, the MBA’s tracker had seen applications drop for seven straight weeks until slight increases during the weeks ending Nov. 11 and Nov. 18. The past four weeks saw mortgage applications of all types drop by 10.6 percent.
Refinance activity did increase last week. The MBA’s refinance activity tracker increased 5 percent from the previous week but was 86 percent lower compared to the same week one year ago. The seasonally adjusted purchase activity tracker decreased 3 percent from one week earlier. The unadjusted purchase activity increased 31 percent compared with the previous week and was 40 percent lower than the same week one year ago.
“Mortgage applications decreased 2 percent compared to the Thanksgiving holiday-adjusted results from the previous week, even as mortgage rates continued to trend lower,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “Rates decreased for most loan products, with the 30-year fixed declining 8 basis points to 6.41 percent after reaching 7.16 percent in October. The 30-year fixed rate was 73 basis points lower than a month ago – but was still more than three percentage points higher than in December 2021.”
The refinance share of mortgage activity increased to 28.7 percent of total applications last week compared to 26.1 percent in the previous week. The adjustable-rate mortgage (ARM) share of total mortgage activity increased to 7.6 percent of total applications.
The FHA share of total applications increased to 13.7 percent from 12.2 percent the week prior. The VA share of total applications increased to 11.4 percent compared it 11.2 percent in the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.
“Purchase activity slowed last week, with a drop in conventional purchase applications partially offset by an increase in FHA and USDA loan applications,” Kan said.
Kan added that the average loan size for purchase applications fell to the lowest level since January 2021 at $387,300.
“The decrease [in average loan size] was consistent with slightly stronger government applications and a rapidly cooling home-price environment,” Kan said.
