Mortgage applications remain weak despite record-low rates

TRD New York /
Dec.December 21, 2011 08:53 AM

U.S. mortgage applications decreased 2.6 percent on a seasonally adjusted basis for the week ending Dec. 16, according to weekly data from the Mortgage Bankers Association released today. Unadjusted, the decline was 2.8 percent.

Mortgage applications for purchases fell 4.9 percent, on a seasonally adjusted basis, while refinancing applications stumbled 1.6 percent. Refinancings comprised 80.7 percent of mortgage applications last week, up from 79.7 percent the week before to their highest level of the year. The adjustable-rate mortgage share of activity dropped to a year-low 5.1 percent from 5.6 percent.

In November, the average loan size was $217,774, up from $213,430 in October.

After bottoming out to their lowest rates of the year in the previous MBA report, mortgage rates declined further this past week. Mortgage rates declined across the board from the previous week, to the lowest rates of the year. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances (less than $417,500 under a new law) decreased to 4.08 percent from 4.12 percent. Jumbo loan rates fell to 4.44 percent from 4.47 percent. FHA-backed 30-year fixed-rate mortgages hit a new valley after declining one-hundredth of a percentage point to at 3.93 percent. Finally, the average contract interest rate for 15-year fixed-rate mortgages bottomed out at 3.39 percent after sitting at 3.44 percent the prior week.

The MBA expressed disappointment in the fact that the record-low rates are not spurring mortgage activity. Refinance applications fell slightly, and purchase applications dropped further as we head into the end of the year,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Remarkably low rates are not enough, as many homeowners continue to hold back due to lack of equity in their properties, poor credit and a weak job market.” — Adam Fusfeld


Related Articles

arrow_forward_ios
Housing and Urban Development Secretary Ben Carson (Credit: Getty Images, iStock)

HUD wants to jumpstart bank lending on low-income homes

Lenders issued the most mortgages in 14 years last quarter (Credit: iStock)

Nonbank lenders could give serious boost to cooling housing market

The number of closed sales fell by more than 14 percent year over year in the third quarter (Credit: iStock)

Low mortgage rates are killing Manhattan’s all-cash buyer

(Credit: iStock)

Despite housing market slowdown, mortgage lenders just had a great second quarter

The Daily Dirt: The dark cloud hanging over buyers

The Daily Dirt: The dark cloud hanging over buyers

Trump proposal would make getting a mortgage harder for homeowners deep in debt

Trump proposal would make getting a mortgage harder for homeowners deep in debt

Amazon CEO Jeff Bezos and Realogy CEO Ryan Schneider (Credit: Getty Images and iStock)

Everything you need to know about Realogy and Amazon’s TurnKey partnership

The trend could reverse as younger people start to enter the real estate market (Credit: iStock)

Almost 40% of homes in the US are
mortgage-free

arrow_forward_ios