Mortgage Applications Decline Over the Holiday Period

According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Application Survey, for the two-week period ending Friday, December 29th, the Market Composite Index—a measure of mortgage loan application volume—declined 9.4% on a seasonally adjusted basis. On an unadjusted basis, the Index decreased 38.0% compared with two weeks ago. The results include adjustments to account for the holidays.

The Refinance Index, which also includes a holiday adjustment, decreased 18.0% from two weeks ago. The unadjusted Refinance Index declined 43% from two weeks ago. Both measures were 15% higher than the same period one year ago.

The seasonally adjusted Purchase Index declined 5.0% compared with two weeks ago. The unadjusted Purchase Index decreased 34.0% compared with two weeks ago and was 12.0% lower than the same period one year ago.

Commenting on the results of the survey, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Markets continued to digest the impact of slowing inflation and potential rate cuts from the Federal Reserve, helping mortgage rates to stay at levels close to the lowest since mid-2023. The 30-year fixed mortgage rate edged higher last week and ended 2023 at 6.76%, over a percentage point lower than its recent peak of 7.9% in October 2023. The recent decline in rates has given the housing market some cause for optimism going into 2024, but purchase applications have not yet picked up in response, with the overall level of purchase activity 12% lower than a year ago. Refinance applications were still at very low levels but were 15% higher than a year ago.

The housing market has been hampered by a limited supply of homes for sale, but the recent strength in new residential construction will continue to help ease inventory shortages in the months in come.”