After two weeks of decreases, the Mortgage Bankers Association reported that mortgage applications increased 1.1% during the week ending Dec. 11 amid mortgage rates that hit a new survey low.
In its latest weekly survey the MBA said the 30-year fixed mortgage rate dropped five points to 2.85% – due, partly, to uncertainty over the prospects of additional pandemic-related government stimulus, as well as concerns about the continued rise in COVID-19 cases across the country, according to Joel Kan, MBA associate vice president of economic and industry forecasting.
“Homeowners once again acted on the decline in rates, with refinance activity rising for the second straight week and up 105% from a year ago,” Kan said.
He added that purchase applications rose for the sixth straight week to the highest levels since June.
“This is perhaps a sign that more first-time buyers are entering the market,” Kan said.
The unadjusted purchase index also increased, jumping 0.4% from the previous week. The refinance index, as Kan noted, rose 1% from the previous week, and is up 105% from the previous year.
The refinance share of mortgage activity increased to 72.7% of total applications, up from an even 72% the previous week. The adjustable-rate mortgage share of activity also increased to 1.8% of total applications.
The FHA share of total applications increased to 11% from 9.9% the week prior. The VA share of total applications decreased to 12.1% from 12.7% 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) decreased to 2.85% from 2.9% – a survey low
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) decreased to 3.12% from 3.2%, following two consecutive weeks where jumbo loan balances saw an increase
- The average contract interest rate for 30-year fixed-rate mortgages fell to 2.96% from 2.97%
- The average contract interest rate for 15-year fixed-rate mortgages decreased to a survey-low 2.49% from 2.51% – the second consecutive week where 15-year fixed-rate mortgage rates hit a survey-low
- The average contract interest rate for 5/1 ARMs decreased to 2.58% from 2.60%