Falling Demand for Mortgage Loans

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The Mortgage Bankers Association reported a drop in mortgage applications of 3.3% during the week ended December 12th compared to the previous week. The volume declined on a seasonally adjusted basis even though the mortgage rates remained at low levels.

On a seasonally unadjusted basis, the application volume decreased by 4%. The volume of applications for mortgage refinance did not change during the week ended December 12th. It remained at its level from the week before.

The seasonally adjusted Purchase Index, which indicates the applications for home purchase loans, declined by 7%. On an unadjusted basis, the volume of applications for these mortgage loans decreased by 10%. It remained 5% lower compared to the same week of last year.
Even though the level of applications for mortgage refinance remained the same as the previous week, their share in the total volume of applications rose to 66% from 64% in the week before. This is the largest share which the refinance applications have reached since December of last year.

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The chief economist of the MBA, Mike Fratantoni, said that interest rates dropped during the week amidst falling oil prices and the greater concerns over the growth in the global economy. He noted that despite the decrease in mortgage rates, the volume of mortgage refinance applications did not change during the week.

The MBA data revealed a decrease in the average contract rate for 30-year fixed-rate conforming mortgage loan to 4.06% from 4.11% in the week before. This is the lowest level which the rate on this type of loan has reached since May of last year. The average contract rate of a 30-year jumbo loan declined to 3.99% from 4.07%.

The 15-year fixed-rate mortgage had an average contract rate of 3.33% in the week ended December 12th. It decreased from 3.35% from the week before.

Christian

Christian

Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info
Christian

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