Report: Mortgage applications decrease, but refinancing jumps

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.

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."