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Mortgage Applications Fall as Rates Nudge Higher; Refinance Share Climbs to Fall Peak

Investors pushed borrowing costs higher after the Fed’s cut, prompting a year-end pullback in purchase demand.

Overview

  • MBA’s weekly survey for the week ending Dec. 12 shows total mortgage applications down 3.8% as the average 30-year fixed rate rose to about 6.38%.
  • Purchase activity decreased 3% on a seasonally adjusted basis and 7% unadjusted from the prior week, though it was 13% higher than a year earlier.
  • Refinance applications fell 4% week over week but were 86% above last year, lifting refis to 59% of activity, the highest share since September.
  • MBA’s November Builder Application Survey shows new-home mortgage applications up 3.1% year over year and down 7% from October, with an estimated 755,000 SAAR in new-home sales, off 2.1% from October.
  • New-home borrowers leaned more on affordability tools as FHA accounted for about 37% of applications and 24% chose ARMs, while the average new-home loan size edged down to $378,063 and growing inventories offered more choices.