Mortgage Apps: Refis Slide, Purchases Steady

Bottom Line:   Mortgage applications were notably lower in the first full week of December following some volatility due to seasonal adjustments around Thanksgiving. Resuming the trends seen over the quarter, applications for refinancing were notably lower, while purchase application volume was slightly higher and still trending up after bottoming in August. Secondary mortgage market spreads remained wide, especially relative to longer-maturity Treasuries, with the yield curve flattening.  Current coupon yields have hovered just over 2%, with the primary mortgage rate averaging about 3.40% adjusted for points paid. Overall, mortgage volumes continue to slow as homeowners who have the incentive and ability to refi have already done so. Still, purchase volumes remain historically robust amid a strong housing market. The MBA Mortgage Application Index FELL -4.0% to 592.0, BELOW the 13-week average of 656.0 and -31.0% BELOW the year-ago level. Non-seasonally adjusted the index FELL -5.5%.The Purchase Index ROSE slightly, UP 0.7% to 297.0, ABOVE the 13-week average of 284.0 but -10.4% BELOW the year-ago level.
 
The Refinancing Index FELL -6.4% to 2350.0, BELOW the 13-week average of 2803.0 and -41.4% BELOW the year-ago level.The effective (adjusted for points paid) 30-year mortgage rate was nearly unchanged at 3.41%, ABOVE the 13-week average of 3.32%, and 16bps ABOVE the year-ago level.