Mortgage Rate Drop Does Not Lift Activity

A sharp drop in rates during the December 12 week failed to lift mortgage activity with the purchase index falling a steep 7.0 percent and the refinance index unchanged. There was, however, an 11.0 percent pickup in government refinance applications led by a 16.0 percent rise for VA refinance applications. The trend for the purchase index, in a negative for home sales, remains in the negative column at a year-on-year minus 5.0 percent. The average 30-year fixed mortgage for conforming loan balances ($417,000 or less) fell 5 basis points in the week to 4.06 for the lowest rate since May last year.