Mortgage applications dropped 4.2% from two weeks prior, according to the latest report by the Mortgage Bankers Association.
Mortgage rates continued 2020’s trend at historically low figures, with the 30-year fixed rate at 2.86% and the 15-year fixed rate at a survey low of 2.40%, according to Joel Kan, MBA’s associate vice president of economic and industry Forecasting.
But mortgage applications dropped during the week ending Jan. 1 – an annual occurrence during the holiday season. That should change as the year progresses, Kan said.
“The steady demand for home buying throughout most of 2020 should continue in 2021,” he said. “MBA is forecasting for purchase originations to rise to $1.59 trillion this year, which would be an all-time high.”
The unadjusted index decreased 33% from two weeks ago, and the holiday adjusted refinance index decreased 6%.
The seasonally adjusted purchase index also decreased 0.8% from two weeks ago.
The FHA share of total mortgage applications remained unchanged from 10.1% the week prior. The VA share of total mortgage applications increased to 13.6% from 12.1% the week prior.
Here is a more detailed breakdown of this week’s mortgage application data:
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 2.86% from 2.9%
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) decreased to 3.08% from 3.09%
- The average contract interest rate for 30-year fixed-rate mortgages fell to 2.90% from 2.95%
- The average contract interest rate for 15-year fixed-rate mortgages decreased to a survey-low 2.40% from 2.42%
- The average contract interest rate for 5/1 ARMs increased to 2.63% from 2.57%