MBA Survey: Rates Up Slightly, Mortgage Applications Decline

January 6, 2016
The MBA Mortgage Applications Index FELL by 11.6% during the week ended January 1 to 328.6, sharply below its 13 week average of 409.7 and 0.4% BELOW its year ago level. On a longer term basis, mortgage applications rose from early 2011 until May 2013 when the trend topped out and began a steady retreat. However, the declining trend bottomed in December 2014, turned sharply higher in early 2015 but the trend is now started to shift lower. The Purchase Index FELL by 11.1% to 196.2, modestly below its 13 week average of 206.8 but still 23.2% ABOVE its year ago level. The level of purchase activity had stayed quite low, amid moderate volatility, since May 2010 but is now turning modestly higher. The Refinance Index FELL by 12.4% to 1,115. With this decline, refinancing activity is sharply below its 13 week average of 1,585 and 17.4% BELOW its year ago level. This sub-index is now moderately lower after the Fed hike. Contract Mortgage Rates ROSE with the 30-year fixed rate increasing by 1 bp to 4.20% and with the 15-year fixed rate increasing by 5 bps to 3.47%. Bottom Line: Mortgage activity fell sharply during the holiday shortened week, declining for the 10th time in the last 13 weeks. Mortgage rates were up slightly on the week and are averaging about 20 bps higher than in October when 30 year conforming balance mortgage rates hovered just below 4.00%. Home buying declined sharply while refinancing activity declined for the 8th time in the last 13 weeks.
Article by contingentmacro