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Year End Result: Mortgage Applications Decreased

Mortgage applications decreased 2.8 percent from two weeks earlier, according to data from the MBA Weekly Mortgage Applications Survey for the week ending December 29, 2017 that was released on Wednesday. The survey took into account seasonal adjustments, including adjustments made for the Christmas holiday. On an unadjusted basis, the Market Composite Index, a measure of mortgage loan application volume, decreased 42 percent compared with two weeks ago.

The survey indicated that the Refinance Index decreased 7 percent from two weeks ago, while the seasonally adjusted Purchase Index increased 1 percent from two weeks earlier. The unadjusted Purchase Index decreased 40 percent compared with two weeks ago and was 3 percent higher than the same week one year ago.

While the index changes were calculated relative to two weeks prior, compositional and rate measures were presented relative to the previous week only in the survey.

The refinance share of mortgage activity increased to 52 percent of total applications from 51.8 percent the previous week. The adjustable-rate mortgage share of activity decreased to 5.3 percent of total applications.

The survey indicated that the FHA share of total applications increased to 10.4 percent from 10.3 percent in the prior week, while the VA share of total applications increased to 11.2 percent from 10.6 percent. The USDA share of total applications increased to 0.8 percent from 0.7 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged from the week prior at 4.25 percent, with points increasing to 0.36 from 0.35 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.13 percent from 4.21 percent, with points increasing to 0.21 from 0.20 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.17 percent from 4.15 percent, with points increasing to 0.40 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.65 percent from 3.66 percent, with points decreasing to 0.34 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.40 percent from 3.56 percent, with points increasing to 0.73 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

 

About Author: Radhika Ojha

Radhika Ojha, Online Editor at the Five Star Institute, is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master’s degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Dallas, Texas. You can contact her at Radhika.Ojha@theMReport.com.

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