As typically happens every holiday season, mortgage application volume took a steep dive during the last two weeks of 2016.
According to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey, total volume decreased 12% during the two weeks ended Dec. 30. That includes an adjustment to account for the Christmas holiday.
Most of the decrease was due to a sharp drop-off in applications for refinances, which fell 22%. Applications for purchases decreased 2% from two weeks earlier.
On an unadjusted basis, total volume decreased 48%. Applications for purchases fell 41% compared with two weeks earlier, on an unadjusted basis, and decreased 1% compared with the last two weeks of 2015.
Despite the drop-off in refinances (which came, ironically, as rates started to decrease again), the refinance share of mortgage activity increased to 52.2% of total applications – up from 51.8% the previous week.
Mortgage rates decreased for the first time in about seven weeks during the week ended Dec. 30, with the average rate for a 30-year, fixed-rate mortgage (FRM) falling to 4.39%, down from 4.45% the previous week.
The average rate for a jumbo 30-year FRM was 4.37%, down from 4.41%.
The average rate for a 30-year FRM backed by the Federal Housing Administration (FHA) remained unchanged at 4.22%.
The average rate for a 15-year FRM was 3.64%, down from 3.70%.
The average rate for a 5/1 adjustable-rate mortgage (ARM) was 3.28%, down from 3.41%.
The ARM share of activity decreased to 5.4% of total applications.
Looking at the government loans, applications for mortgages backed by the FHA represented 11.6% of all applications – up from 10.7% the week prior. The Veterans Affairs share of total applications was 12.3%, down from 12.4%. The U.S. Department of Agriculture share of total applications was 1.1%, up from 1.0%.