Mortgage applications fell during the week ending Dec. 14 in spite of an across-the-board decline in rates, according to the Weekly Mortgage Applications Survey released by the Mortgage Bankers Association (MBA).
The Market Composite Index, a measure of mortgage loan application volume, decreased 5.8% on a seasonally adjusted basis and fell 7% on an unadjusted basis.
The Refinance Index decreased 2%. The Purchase Index decreased 7% on a seasonally adjusted basis and fell 10% on an unadjusted basis. The unadjusted Purchase Index was 2% higher than the same week one year ago.
"Despite mortgage rates falling across the board last week to their lowest levels in three months, mortgage applications also declined, as more potential borrowers likely stayed away because of ongoing financial market volatility and economic uncertainty," Joel Kan, MBA's associate vice president of economic and industry forecasting. "Purchase applications decreased almost 7% over the week and refinances decreased around 2%, led by a larger decline in government refinances compared to conventional refinances."
Refinance applications saw their highest share of mortgage activity since February after it increased to 43.5% from 41.5%. The adjustable-rate mortgage (ARM) share of activity increased to 7.9% of total applications.
Applications for FHA mortgage fell to 10.4% from 10.8%. The VA share of total applications decreased to 9.9% from 10.2%. USDA applications accounted for 0.6%, down from the previous 0.7% share.