by Calculated Risk on 1/03/2019 07:00:00 AM

From the MBA: Mortgage Applications Decrease Over Two Week Period in Latest MBA Weekly Survey

Mortgage applications decreased 9.8 percent from two weeks earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 28, 2018. The results include adjustments to account for the Christmas holiday.

... The Refinance Index decreased 12 percent from two weeks ago. The seasonally adjusted Purchase Index decreased 8 percent from two weeks earlier. The unadjusted Purchase Index decreased 46 percent compared with two weeks ago and was 6 percent lower than the same week one year ago.
...
“Mortgage applications fell over the past two weeks – even as the 30-year fixed-rate mortgage decreased to 4.84 percent, its lowest since September 2018. Investors continued to show a preference for safer U.S. Treasuries, as concerns over U.S. and global economic growth, along with uncertainty over the current government shutdown, drove rates lower,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Even with lower borrowing costs, both purchase and refinance applications decreased over the two-week holiday period, as both conventional and government applications dropped. Part of the decline in mortgage applications was possibly because of the government shutdown, as concerns over delays in FHA application processing times likely contributed to the weakness in activity.”
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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.84 percent from 4.86 percent, with points decreasing to 0.42 from 0.47 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.


The first graph shows the refinance index since 1990.

Refinance activity will not pick up significantly unless mortgage rates fall 50 bps or more from the recent level.

The second graph shows the MBA mortgage purchase index

According to the MBA, purchase activity is down 6% year-over-year.