WASHINGTON – Mortgage applications increased 0.8% from the previous week, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Dec. 18.
The Market Composite Index, a measure of mortgage loan application volume, increased 0.8% on a seasonally adjusted basis from one week earlier, the MBA said in a news release. On an unadjusted basis, the index increased 1% compared with the previous week.
The Refinance Index, which tracks mortgage refinancing activity, increased 4% from the previous week and was 124% higher than the same week one year ago. The seasonally adjusted Purchase Index, a weekly measurement of nationwide home loan applications based on a sample of about 75% of U.S. mortgage activity, dropped 5% from one week earlier.
The unadjusted Purchase Index dropped 7% compared with the previous week and was 26% higher than the same week one year ago.
“Mortgage rates are closing the year at record lows,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “The 30-year fixed-rate - at 2.86 percent - is a full percentage point below a year ago. Last week’s increase in refinance applications was driven by FHA and VA activity, while conventional refinances saw a slight decline.
Overall refinance activity was 124 percent higher than in 2019, as borrowers continue to seek lower monthly payments or different loan terms.
“Purchase applications decreased for the second time in three weeks, as both conventional and government applications saw a drop-off. Despite the decline, purchase applications remained 26 percent higher than the same week a year ago, and the average loan balance reached another record high.”