Mortgage applications dropped sharply during the holidays, plunging 9.1 percent for the week ending Jan. 2 compared to two weeks earlier, according to the Mortgage Bankers Association’s mortgage activity index. The index reflects adjustments for New Year’s Day and Christmas Day when banks are closed.
Applications for refinancings dropped 12 percent from two weeks ago, while mortgage applications for home purchases, viewed as a leading gauge activity, dropped 5 percent.
“Beyond the seasonal slowdown, purchase application volume remains about 8 percent below last year’s level, indicating that home buyers are still cautious,” says the MBA’s chief economist, Mike Fratantoni.
Home shoppers have been slow to jump into the housing market, despite low mortgage rates. The 30-year fixed-rate mortgage fell to 4.01 percent for the week ending Jan. 2, according to the MBA. Lower bond yields this week are pushing rates even lower, with the average 30-year fixed-rate mortgage now a full quarter point lower than average rates available in the second half of December, the MBA notes.
Source: “Weekly Mortgage Applications Fall Sharply Over Holidays,” CNBC (Jan. 7, 2015)