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Report: Mortgage applications decrease, but refinancing jumps

A sale sign is seen outside a home on the market in Arlington, Va., on July 23, 2009. The Mortgage Bankers Association said Wednesday that overall mortgage applications were down last week but refinancing increased. File Photo by Alexis C. Glenn/UPI
A sale sign is seen outside a home on the market in Arlington, Va., on July 23, 2009. The Mortgage Bankers Association said Wednesday that overall mortgage applications were down last week but refinancing increased. File Photo by Alexis C. Glenn/UPI | License Photo

Dec. 7 (UPI) -- Overall mortgage applications decreased by a seasonally adjusted 1.9% last week from the week before, but the percentage of those looking to refinance increased by 5%, according to new figures from the Mortgage Bankers Association released Wednesday.

The new mortgage numbers come as the average interest rates for a 30-year fixed-rate mortgage for conforming loan balances of $647,200 or less dropped from 6.49% to 6.41% over the same period.

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The average interest rate for adjustable-rate mortgages increased to 5.59% from 5.48%. The seasonally adjusted Purchase Index dropped 3% from one week earlier.

"Mortgage applications decreased 2% compared to the Thanksgiving holiday-adjusted results from the previous week, even as mortgage rates continued to trend lower," Joel Kan, MBA's vice president and deputy chief economist, said in a statement.

"The 30-year fixed rate was 73 basis points lower than a month ago -- but was still more than 3 percentage points higher than in December 2021. Additionally, the pace of refinancing remained around 80% lower than a year ago."

Kan said the drop in purchase applications was offset by an increase in FHA and USDA loan applications.

"The average loan size for purchase applications decreased to $387,300 -- its lowest level since January 2021," he said. "The decrease was consistent with slightly stronger government applications and a rapidly cooling home-price environment."

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