· According
to the Mortgage Bankers Association, the total number of mortgage
applications plunged last week by 5.7% and erased all of the prior
weeks' gain. The drop lowered December 1.0% below November.
· Purchase applications reversed virtually all of the prior week's rise with a 3.5% decline although increases through much of last month left the average in December 2.9% above November.
· Applications to refinance slid 9.7% w/w and the December average is 7.5% below November.
· The effective interest rate on a conventional 30-year mortgage slipped to 6.53% from 6.58% the prior week. Rates averaged 6.52% in November and averaged 5.81% in June. The effective rate on a 15-year mortgage also fell to 6.15%. The interest rates on 15 and 30 year mortgages are closely correlated (>90%) with the rate on 10 year Treasury securities.
· The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site here.