Mortgage applications down as refin activity slips

Mortgage applications dropped 4.2% from two weeks prior, according to the latest report by the Mortgage Bankers Association.

Mortgage rates continued 2020’s trend at historically low figures, with the 30-year fixed rate at 2.86% and the 15-year fixed rate at a survey low of 2.40%, according to Joel Kan, MBA’s associate vice president of economic and industry Forecasting.

But mortgage applications dropped during the week ending Jan. 1 – an annual occurrence during the holiday season. That should change as the year progresses, Kan said. 

The unadjusted index decreased 33% from two weeks ago, and the holiday adjusted refinance index decreased 6%.

The seasonally adjusted purchase index also decreased 0.8% from two weeks ago.

The FHA share of total mortgage applications remained unchanged from 10.1% the week prior. The VA share of total mortgage applications increased to 13.6% from 12.1% the week prior.

Here is a more detailed breakdown of this week’s mortgage application data:

• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 2.86% from 2.9%
• The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) decreased to 3.08% from 3.09%
• The average contract interest rate for 30-year fixed-rate mortgages fell to 2.90% from 2.95%
• The average contract interest rate for 15-year fixed-rate mortgages decreased to a survey-low 2.40% from 2.42%
• The average contract interest rate for 5/1 ARMs increased to 2.63% from 2.57%