PhotoMortgage applications were down for the second week in a row last week.

The Mortgage Bankers Association reports applications dipped 0.7% in the week ending December 2. The prior week’s results included an adjustment for the Thanksgiving holiday.

While the Refinance Index was down 1% percent from the previous week, the refinance share of mortgage activity increased to 56.2% of total applications from 55.1% a week earlier.

The adjustable-rate mortgage (ARM) share of activity was 6% -- the highest level since February; the FHA share rose to 11.3% from 10.4% the week prior; the VA share went to 12.6% from 11.7%; and the USDA share of total applications rose to 0.9% from 0.8% the week before.

Contract interest rates

  • The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) rose four basis points -- from 4.23% to 4.27% -- its highest level since October 2014, with points decreasing to 0.37 from 0.41 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
  • The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) increased to its highest level since September 2014 -- moving to 4.22% from 4.18%, with points unchanged at 0.29 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
  • The average contract interest rate for 30-year FRMs backed by the FHA remained unchanged at 4.99% -- its highest level since July 2015, with points decreasing to 0.38 from 0.44 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
  • The average contract interest rate for 15-year FRMs jumped five basis points to 3.53%, its highest level since September 2014, with points increasing to 0.39 from 0.33 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
  • The average contract interest rate for 5/1 ARMs increased to its highest level since September 2013 -- 3.39% from 3.23% -- with points decreasing to 0.28 from 0.44 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The survey covers over 75% of all U.S. retail residential mortgage applications.


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