“During the holidays, most people don’t want to purchase homes because everyone wants to take a vacation,” John Gates III, an originator with Union Mortgage Group, told Mortgage Professional America, noting h expects the market to rebound soon. “Interest rates have not really changed and the industry dynamics have not changed; I expect a good 2016.”
Mortgage applications decreased 27% from two weeks earlier for the week ending January 1, according to the Mortgage Bankers Association. That includes adjustments for New Years; the previous mark included adjustments for Christmas.
Refinance business also take a hit, decreasing 37% over the previous weekly stats.
“The refinance share of mortgage activity decreased to 55.4 percent of total applications from 56.1 percent the previous week,” MBA wrote in its weekly application release. “The adjustable-rate mortgage (ARM) share of activity decreased to 4.7 percent of total applications.”
Downward trends in refi business are expected to continue, according to Gates.
“Refinance business has pretty much dried up,” he said.
Rates, meanwhile, experienced slight increases for most mortgage types.
“The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 4.20 percent, its highest level since July 2015, from 4.19 percent,” the MBA wrote. “The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.09 percent from 4.07 percent.”
Applications may be down but originators have no cause for worry, according to one industry veteran.