Refinance application share reaches highest level since September

"Mortgage rates inched up last week following the FOMC meeting, as investors interpreted the comments to signal that we are near the end of this rate-cutting cycle. As a result, mortgage applications declined slightly, said Mike Fratantoni, the MBA's senior vice president and chief economist. Purchase application volume typically drops off quickly at the end of the year, and this shifts the mix of the business, with the refinance share reaching 59% last week, the highest level since September."

"However, refinance activity has remained mostly the same for the past month as rates continue to hold at around the same narrow range. The seasonally adjusted purchase index decreased 3% from one week earlier. The unadjusted purchase index decreased 7% compared with the previous week and was 13% higher than the same week one year ago. By product type, the adjustable-rate mortgage (ARM) share of activity increased to 7.2% of total applications."

Mortgage rates rose slightly after the FOMC meeting and mortgage applications declined modestly. Year-end purchase volume typically falls, shifting the business mix and raising the refinance share to 59%, the highest since September. Refinance activity has been largely unchanged over the past month as rates remained in a narrow range. The seasonally adjusted purchase index fell 3% week-over-week; the unadjusted purchase index fell 7% week-over-week and was 13% higher than the same week a year earlier. ARM share increased to 7.2%; FHA share fell to 19.5% and VA share rose to 16.6%; USDA share rose to 0.4%. Thirty-year conforming averaged 6.38% (up 5 bps); jumbo 6.44% (down 2 bps); FHA 6.12% (up 4 bps); 15-year 5.72% (up 1 bp); 5/1 ARM 5.63% (up 12 bps).

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