U.S. Mortgage Applications Volumes Collapse Over the 2016 Holiday Season

The Market Composite Index, a measure of mortgage loan application volume, decreased 12 percent on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the Index decreased 48 percent compared with two weeks ago.

The Refinance Index decreased 22 percent from two weeks ago. The seasonally adjusted Purchase Index decreased 2 percent from two weeks earlier. The unadjusted Purchase Index decreased 41 percent compared with two weeks ago and was 1 percent lower 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 increased to 52.2 percent of total applications from 51.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4 percent of total applications.

The FHA share of total applications increased to 11.6 percent from 10.7 percent the week prior. The VA share of total applications decreased to 12.3 percent from 12.4 percent the week prior. The USDA share of total applications increased to 1.1 percent from 1.0 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.39 percent from 4.45 percent, with points increasing to 0.43 from 0.39 (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) decreased to 4.37 percent from 4.41 percent, with points increasing to 0.44 from 0.21 (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 remained unchanged at 4.22 percent, with points decreasing to 0.34 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.64 percent from 3.70 percent, with points increasing to 0.38 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.28 percent from 3.41 percent, with points increasing to 0.42 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.