Rising mortgage rates suppressed applications in the Mortgage Bankers Association (MBA) final mortgage applications survey index of 2024, released on Thursday. Unsurprisingly, application volume dropped significantly even with a seasonal adjustment to account for the holidays.
Mortgage demand declined 21.9% from two weeks earlier during the week ending Dec. 27, the MBA reported. Applications for refinances drove the decrease in the overall index as they fell 36%, while applications for purchase loans were down 13%. On a year-over-year basis, refi demand was up 10% and purchase demand was down 10%.
“Mortgage rates moved higher through the last full week of 2024, reaching almost 7 percent for 30-year fixed-rate loans,” Mike Fratantoni, the MBA’s senior vice president and chief economist, said in a statement. “Not surprisingly, this increase in rates — at a time when housing activity typically grinds to a halt — resulted in declines in both refinance and purchase applications.”
Data at HousingWire‘s Mortgage Rates Center also shows consistent upward movement in the cost of a home loan during the last two weeks of the year. Rates for 30-year conforming loans averaged 7.10% on Thursday, up 21 basis points (bps) in the past two weeks. Rates for 15-year conforming loans rose 7 bps to 7.02%.
Mortgage demand had been on the upswing for much of November and December. But a string of five straight weekly increases in the MBA’s index was snapped during the week ending Dec. 13.
For the week ending Dec. 27, the refinance share of all applications fell to 39.4%, down nearly 5 percentage points from two weeks earlier. Government lending programs saw mixed results as applications for Federal Housing Administration (FHA) loans fell by 60 bps to a market share of 16.6%, while applications for Department of Veterans Affairs (VA) loans rose by 50 bps to a share of 15.7%.
Rate increases were seen across the board for nearly every loan type, according to the MBA. Contract interest rates for 30-year fixed loans with conforming balances of $766,550 or less averaged 6.97%, up 8 bps from two weeks earlier. Rates for 30-year jumbo loans jumped 14 bps to 7.13%.
Rates for FHA loans and 15-year fixed loans rose slightly to 6.69% and 6.37%, respectively. Rates for 5/1 adjustable-rate mortgages shed 14 bps to average 5.97%.
The MBA’s weekly applications survey includes closed-end residential mortgage applications originated through retail and consumer-direct channels. The index is benchmarked at 100 in March 1990.
