Small Decrease in the Mortgage Applications in December

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The Mortgage Bankers Association reports a decline of 0.4% in the mortgage applications for the purchase of a new home in December 2014 compared to November. The movement in the applications does not reflect any common seasonal patterns.

The share of new home purchase loan applications for conventional loans was traditionally the highest. These apps accounted for 70.8% of the total volume of applications. The second largest share was that of applications for FHA loans. It was 15.3%. The VA loans took the third largest share which was 12.7%. The applications for USDA loans has the smallest share. It was 1.2%.

Even though the mortgage applications for purchasing a new home declined in December 2014, their average size increased. It rose to $311,398 from $306,975 in November.

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The MBA used date from BAS to estimate the rate of new home sales for December. The annual rate of new single-family home sales is December was 409,000 units. Despite the drop in new home purchase loan applications, sales rose compared to November. They experienced an increase of 2% on a seasonally adjusted basis rising from 401,000 units in November.

The estimated new home sales for December on a seasonally unadjusted basis are 28,000 units. On an unadjusted basis, sales did not experience any increase or drop compared to November.
The projection of the Mortgage Bankers Association is that the mortgage applications for new home purchase will experience increase in January compared to the December level as home buyers get active after the holiday season. The trend of increase is expected to remain in February as well.

The projections of the MBA come at a time when the mortgage rates are at their lowest level since the second quarter of 2013. According to the latest MBA data, the average contract interest rate on a 30-year conventional fixed-rate home loan is 3.89%.



Christian Calvin mortgage Christian is a contributing writer for 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.


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