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Mortgage application volume decreased 0.6% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) latest Weekly Mortgage Application Survey for the week ending December 17, 2021.
With rates still favorable to the wallet, the MBA’s Refinance Index increased 2% from the previous week, and was 42% lower than the same week year-over-year. The seasonally adjusted Purchase Index decreased 3% from one week earlier, while the unadjusted Purchase Index decreased 6% compared with the previous week, and was 9% lower than the same week one year ago.
While overall volume fell slightly, the refinance share of mortgage activity increased to 65.2% of total applications from 63.3% the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 3.4% of total applications.
"Mortgage applications fell last week, driven by a 3% decline in purchase applications. Both conventional and government purchase applications were down, while the average purchase loan increased for the second straight week to $416,200—the second highest amount ever. The elevated loan size is an indication that activity is more on the higher end of the market," said Joel Kan, MBA's Associate VP of Economic and Industry Forecasting. "Home-price appreciation growth remains faster than historical averages and inventory, particularly for starter homes, continues to trail strong demand."
By loan type, the FHA share of total applications remained unchanged at 9.6% week-over-week, while the VA share of total applications increased to 11.5% from 10.6% the week prior. The USDA share of total applications decreased slightly to 0.4% from 0.5% the week prior.
Boosting a slight run on refis are continued low rates, as last week, Freddie Mac’s Primary Mortgage Market Survey (PMMS) found rates hitting 3.12%.
Sam Khater, Freddie Mac’s Chief Economist, noted, “While house price growth is slowing, prices remain high due to solid housing demand and low supply. We expect rates to continue to increase into 2022 which may leave some potential homebuyers with less room in their budgets on the sideline.”
Click here for more on this week’s MBA Weekly Mortgage Application Survey.
