U.S. Mortgage Applications Dip in Late December

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According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending January 2, 2015, mortgage applications decreased 9.1 percent from two weeks earlier.

The most recent week's results include an adjustment to account for the New Year's Day holiday, while the previous week's results were adjusted for the Christmas holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 9.1 percent on a seasonally adjusted basis from two weeks earlier.  On an unadjusted basis, the Index decreased 37 percent compared with two weeks ago.

The Refinance Index decreased 12 percent from two weeks ago.  The seasonally adjusted Purchase Index decreased 5 percent from two weeks earlier while the unadjusted Purchase Index decreased 33 percent compared with two weeks ago. The Purchase Index was 8 percent lower than the same week one year ago.

While the index changes were calculated relative to two weeks prior, the following compositional and rate measures are presented relative to the previous week only.

The refinance share of mortgage activity increased to 65 percent of total applications from 63 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.9 percent of total applications.

The FHA share of total applications increased to 9.3 percent this week from 9.2 percent last week.  The VA share of total applications increased to 10.7 percent this week from 10.5 percent last week.  The USDA share of total applications remained unchanged at 0.9 percent this week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.01 percent from 4.04 percent, with points decreasing to 0.28 from  0.35 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 3.99 percent from 4.05 percent, with points decreasing to 0.24 from 0.37 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.81 percent from 3.82 percent, with points decreasing to -0.03 from 0.08 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.24 percent from 3.32 percent, with points decreasing to 0.30 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.19 percent from 3.26 percent, with points increasing to 0.51 from 0.48 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.