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Mortgage Applications Plunge 12 Percent as Rates Slip

Mortgage Applications Plunge 12 Percent as Rates Slip

(Getty)

Wednesday, 04 January 2017 09:58 AM

Mortgage applications decreased 12 percent from two weeks earlier as borrowing costs on home loans eased from more than two-year highs, according to data from the Mortgage Bankers Association.

The results included adjustments to account for the Christmas holiday.

The Washington-based industry group said its Market Composite Index, a measure of mortgage loan application volume, decreased 12 percent on a seasonally adjusted basis from two weeks earlier. The Refinance Index decreased 22 percent from two weeks ago.

Interest rates on 30-year, fixed-rate conforming mortgages, the most widely held type of U.S. home loans, averaged 4.39 percent, down from the prior week's 4.45 percent which was the highest since April 2014.

Conforming mortgages are those with balances of $417,000 or less and qualify for guarantees from federal mortgage agencies Fannie Mae and Freddie Mac.

Interest rates on other types of mortgages were unchanged to 0.13 percentage point lower on the week.

Domestic home borrowing costs retreated along with a drop in U.S. bond yields as investors scooped up U.S. government debt at year-end following a global bond market selloff triggered by worries about a surge in inflation and federal borrowing under a Trump administration.

In early trading on Wednesday, the benchmark 10-year Treasury yield was 2.45 percent. It had hit 2.64 percent on Dec. 15, which was its highest since September 2014, according to Reuters data.

A pullback in mortgage rates buttressed refinancing activity at the end of 2016.

MBA's refinancing index was up 1.7 percent at 1,132.0 with the refinance share of overall loan activity rising to 52.2 percent from 51.8 percent the previous week.

The group's measure on loan applications to buy a home, which is seen as a proxy on future home sales, dipped 1.4 percent to 228.0.

 

© 2020 Thomson/Reuters. All rights reserved.


   
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Mortgage applications decreased 12 percent from two weeks earlier as borrowing costs on home loans eased from more than two-year highs, according to data from the Mortgage Bankers Association.
mortgage, applications, home loan, borrowing
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2017-58-04
Wednesday, 04 January 2017 09:58 AM
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