On an unadjusted basis, the composite index decreased by 4% week-over-week. The seasonally adjusted purchase index decreased 7% compared to the week ended December 5. The unadjusted purchase index fell by 10% for the week and remains 5% lower year-over-year.
Adjustable rate mortgage loans accounted for 6.2% of all applications, down from 7.0% in the prior week.
The MBA’s refinance index rose from 60% in the prior week to 64%, and the market share for adjustable rate mortgage loan applications dropped to 6.2%.
The average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 4.11 to 4.06%, the lowest since May 2013. The rate for a jumbo 30-year fixed-rate mortgage decreased from 4.07% to 3.99%. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.35% to 3.33%.
The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 3.11% to 3.00%. Rates on a 30-year FHA-backed fixed rate loan fell from 3.87% to 3.86%.
With the 30-year mortgages at 18-month lows, and jumbo loans below 4%, lenders are trying to drum up business, but they are having only partial success, according to MBA’s chief economist:
Amid plummeting oil prices and heightened concerns regarding global economic growth, interest rates dropped sharply through the course of the week, with longer-term Treasury yields falling more than 10 basis points. … Surprisingly, given this large drop in rates, applications for conventional refinance mortgages did not increase last week, but there was a notable pickup in government refinance applications, which were up 11 percent for the week, led by an almost 16 percent increase in VA refinance applications.
ALSO READ: New Housing Starts, Building Permits Drop in November
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