U.S. Mortgage Applications Slide 27 Percent During Holiday Season

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According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending January 1, 2016, mortgage applications decreased 27 percent from two weeks earlier. The most recent week's results include an adjustment to account for the New Year's Day holiday, while the previous week's results were adjusted for the Christmas holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 27 percent on a seasonally adjusted basis from two weeks earlier.  On an unadjusted basis, the Index decreased 50  percent compared with two weeks ago.  The Refinance Index decreased 37 percent from two weeks ago.  The seasonally adjusted Purchase Index decreased 15 percent from two weeks earlier. The unadjusted Purchase Index decreased 40 percent compared with two weeks ago and was 22 percent higher than the same week one year ago.

While the index changes were calculated relative to two weeks prior, the following compositional and rate measures are presented relative to the previous week only.

The refinance share of mortgage activity decreased to 55.4 percent of total applications from 56.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.7 percent of total applications.

The FHA share of total applications increased to 14.6 percent from 13.8 percent the week prior. The VA share of total applications increased to 12.9 percent from 11.6 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.20 percent, its highest level since July 2015, from 4.19 percent, with points decreasing to 0.42 from  0.49 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.09 percent from 4.07 percent, with points increasing to 0.35 from 0.34 (including the origination fee) for 80 percent LTV loans.  The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.95 percent from 3.97 percent, with points increasing to 0.41 from 0.34 (including the origination fee) for 80 percent LTV loans.  The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.47 percent from 3.42 percent, with points increasing to 0.31 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.19 percent from 3.13 percent, with points decreasing to 0.32 from 0.52 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.