Low mortgage rates weren’t the presents some might have been hoping for this holiday season.
Despite attractive borrowing costs, an index tracking mortgage applications to buy homes fell 0.8 percent over the past two weeks, seasonally adjusted, from the week of Dec. 14, according to the Mortgage Bankers Association.
The MBA metric, known as the purchase index, is usually a weekly figure, but the survey released Wednesday encompasses the final fortnight of 2020. It was also adjusted to account for holidays.
For the final five weeks of 2020, applications to purchase homes fell in four of them.
Joel Kan, MBA’s head of industry forecasting, said the two-week holiday slump is typical, and expressed optimism for the housing market in 2021.
“The steady demand for homebuying throughout most of 2020 should continue in 2021,” he said in a statement. “MBA is forecasting for purchase originations to rise to $1.59 trillion this year — an all-time high.”
During the mini-slump, rates dropped for the average 30-year, fixed-rate mortgage fell to 2.86 percent from 2.90 percent two weeks earlier. Jumbo rates fell by one basis point to 3.08 percent.
MBA’s index tracking refinance applications over the past two weeks dropped 6 percent compared to the week of Dec. 14.
The MBA’s overall index, which surveys 75 percent of the residential mortgage market for purchase and refinance applications, dropped 4.2 percent, adjusted. The report has been running since 1990.