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MBA: mortgage applications down 18.6% last week

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Mortgage application volume continues to decline with a huge drop last week, as interest rates remain on an upward swing and demand for refinancings plummets. The Mortgage Bankers Association said its market composite index decreased 18.6% for the week ended Dec. 17 on a seasonally adjusted basis. Unadjusted, the index fell 20% from the prior week. Refinancing applications have decreased for six consecutive weeks and volume is at the lowest point since the end of April after another 24.6% drop last week. The seasonally adjusted purchase index fell 2.5% last week. The unadjusted purchase index declined 4.9% and was 8.4% lower than a year earlier. "Refinance application volume dropped sharply this week as mortgage rates held near six month highs," according to Michael Fratantoni, MBA vice president of research and economics. "Purchase applications fell for a second week, with the level of applications little changed over the past month, indicating that home sales are likely to remain relatively weak over the next few months. In four-week moving averages, the seasonally adjusted market index is down 9.8%, the purchase index is down 1.2% and the refinance index is down 12.7%. The refinancing share of all mortgage applications fell to the lowest point since early June at 72.3% down from 76.7% the week earlier. The average interest rate for a 30-year fixed mortgage has risen steadily for a month and is now at 4.85%, according to the MBA, up slightly from 4.84% the week before. The average rate for a 15-year fixed mortgage also rose a bit last week to 4.22% from 4.21% a week earlier. Write to Jason Philyaw.

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