Mortgage applications decreased 9.4 percent from two weeks earlier, according to the Mortgage Bankers Association, for the week ending December 29, 2023. The results include adjustments to account for the holidays. On an unadjusted basis, the Index decreased 38 percent compared with two weeks ago.
The holiday adjusted Refinance Index decreased 18 percent from two weeks ago and the unadjusted Refinance Index decreased 43 percent from two weeks ago; both measures were 15 percent higher than the same week one year ago.
“Markets continued to digest the impact of slowing inflation and potential rate cuts from the Federal Reserve, helping mortgage rates to stay at levels close to the lowest since mid-2023. The 30-year fixed mortgage rate edged higher last week and ended 2023 at 6.76 percent, over a percentage point lower than its recent peak of 7.9 percent in October 2023,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The recent decline in rates has given the housing market some cause for optimism going into 2024, but purchase applications have not yet picked up in response, with the overall level of purchase activity 12 percent lower than a year ago. Refinance applications were still at very low levels, but were 15 percent higher than a year ago.”
The refinance share of mortgage activity decreased to 36.3 percent of total applications from 39.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6 percent of total applications.